Foreign Direct Investment in Commercial Coal Mining in India

The Government of India has clarified that any foreign direct investment (FDI) in commercial coal mining from an entity of a country that shares land border with India will be allowed only after government approval.

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Key-Points

Recently, the government modified its FDI policy according to which any entity of a country, which shares land border with India or where the beneficial owner of an investment into India is situated in or is a citizen of any such country, could invest only under the Government route.

The new policy further states that a citizen of Pakistan or an entity incorporated in Pakistan can invest, only under the Government route, in sectors and activities other than defence, space and atomic energy.

Even for the sectors which are prohibited for foreign investment, Government route has been made mandatory for all such entities.

Government of India had earlier permitted 100 % FDI under automatic route in coal mining activities, including associated processing infrastructure for sale of coal.