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    Default Govt eases norms for FII investment in commexes

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    Streamlining the procedure to boost foreign investment into the country, the Indian government on Tuesday allowed Foreign Institutional Investors (FIIs) to invest up to 23 per cent in commodity exchanges without seeking its prior approval.

    Besides, to discourage import of sub-standard machinery, the government decided to withdraw the facility of giving equity in lieu of import of second hand equipment, according to the new edition of the consolidated FDI policy, which comes into effect from Tuesday.

    The policy document has been produced by the Department of Industrial Policy and Promotion (DIPP ).

    The government has also made certain other procedural changes in the circular and incorporated announcements made with regard to 100 per cent Foreign Direct Investment (FDI) in single brand and relaxation of guidelines for pharmaceutical sector.

    As regard the commodity exchanges, at present, foreign investment, within a composite (FDI and FII) cap of 49 per cent, under the government approval route is permitted in commodity exchanges.

    "Such investment (up to 23 per cent) by FIIs, in commodity exchanges, will, therefore, no longer require Government approval," it said. However, FDI will continue to need the approval of the FIPB.

    "It has now been decided to liberalise the policy and to mandate the requirement of government approval only for FDI component of the investment," it said.

    DIPP has also decided that the consolidated FDI circular will be announced every year instead of six-monthly basis. The next policy would be on March 29, 2013.

    Experts said that there were no major changes in the circular. "DIPP has done only procedural changes," PwC executive director Akash Gupt said. .



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