Prime Minister Narendra Modi-led Union Cabinet has expanded the scope for foreign direct investment (FDI) in the privatization of the Bharat Petroleum Corporation Limited (BPCL) by permitting 100 per cent FDI in the public sector refineries.
This development will thus make way for selling the government’s 52.98 per cent stake in the BCPL to an international buyer.
It will also create more opportunities for FDI in state-owned oil sector companies that are set to be privatized, keeping in line with the government’s newfound policy of maintaining a bare minimum presence in strategic sectors.
As per the present policy, around 49 per cent of FDI is allowed in public sector refining, whereas it stands at 100 per cent for private sector companies.
“FDI up to 100 per cent will be allowed under the automatic route in cases where a public sector undertaking has received in-principle approval for strategic divestment (in the oil and gas sector),” one of the officials from the government Business Standard.
This alteration was necessary considering that most bidders interested in acquiring BPCL already have certain foreign investments. This includes companies such as Vedanta, Think Gas and Apollo Management.
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