Other conditions include, a minimum of $100 million to be brought in as FDI, of which, at least 50 per cent needs to be invested in 'back-end infrastructure' within three years.
Also, the government reserves the first right to procurement of agricultural products. Of these, fresh agricultural produce, including fruits, vegetables, flowers, grains, pulses, fresh poultry, fishery and meat products, may be unbranded.
There have been no takers for the food retail business so far as several retailers are waiting for a further opening up.
With the budget dismantling the Foreign Investment Promotion Board (FIPB), the entire policy architecture governing foreign investment also needs to be reviewed.
The rationale behind the move is that most foreign direct investment (FDI) is now on the automatic approval trajectory. Only an estimated six or seven per cent of all sectors are under the approval route.
Commerce and industry minister Nirmala Sitharaman had hinted that in the absence of FIPB, departmental regulators might suffice to decide. On the other hand, DIPP secretary Ramesh Abhishek believes administrative departments could also be considered for taking the final call.
With growth in FDI in important sectors, overall foreign inflow rose by 30 per cent to $21.6 billion during the first half of 2016-17. FDI in the country grew by 29 per cent to $40 billion in 2015-16 from the previous financial year.