The current FDI norms impose a ceiling of 24 per cent FDI for companies in the SSI sector i.e. small scale units having capital investment in plant and machinery not exceeding Rs. 50,000,000 (USD 1,250,000). Further, SSI units with foreign investment exceeding the notified sectoral cap are liable to lose their status as SSI units.
With a view to liberalizing the SSI sector and augmenting economic activity in the country, it is announced that FDI norms governing SSIs would be relaxed and a notification is likely to be tabled before Parliament, enabling an increase in the limits of FDI in the SSI sector.
If such notification is passed, SSI units would be eligible to raise foreign equity in accordance with caps governing the sectors in which they operate, thereby improving their access to technology and capital and assisting in the growth and modernization of the sector.
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