From being a License Raj in the 1960s, 70s and 80s, the Indian economy has now turned full circle by transforming itself into a liberalized economy. The Industrial Policy of 1991 paved the way for economic liberalization of the Indian Economy which led to billions of dollars finding its way into India as Foreign Direct Investment.

The Government now controls only key areas such as Railways, Atomic Energy etc. Most of the business sectors are now fully or partially open to foreign investment.

There are now only a handful of business areas where 100% FDI is restricted. Further almost all the business sectors where 100% FDI is permitted have been put on the automatic approval route.

Entry Strategies for Foreign Companies

Sectors wherein 100% FDI is not permitted:
Business Sectors and FDI Cap
Trading

100% FDI in Trading is allowed under the following circumstances:
Real Estate

Totally Prohibited Business Sectors for Foreign Direct Investment

Agriculture (excluding Floriculture, Horticulture, Development of Seeds, Animal Husbandry, Pisiculture and cultivation of vegetables, mushrooms, etc. under controlled conditions and services related to agro and allied sectors)

Atomic Energy

Lottery, Gambling & Betting

Plantation (excluding Tea Plantations subject to compulsory divestment of 26% equity in five years)

Postal services (excluding courier services) Distribution of Letters totally prohibited.