The government may tweak FDI policy to allow 100 percent Foriegn Direct Investment (FDI) in Bharat Petroleum Corporation (BPCL). A consensus has been built up among concerned ministries, and a final decision may be taken very soon, even before the financial bids open.

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As per the current FDI policy, FDI is restricted to 49 percent under the automatic route in petroleum refining by Public Sector Undertaking (PSU), without any disinvestment or dilution of domestic equity.

According to the sources, the government is planning to amend the FDI policy and FEMA provisions, so that 100 percent FDI may be allowed through the automatic route in BPCL.

Under the proposed amendment, the government may include a standalone provision to allow 100 percent FDI through the automatic route in PSUs in the petroleum and natural gas sector which are under the privatisation process. Earlier, the government adopted the same route before inviting bids for Air India for the second time.

Sources said several rounds of discussions took place between DIPAM (Department of Investment and Public Asset Management), Department of Economic Affairs and DPIT (Department for Promotion of Industry and Trade), during the last few weeks.

All departments agreed on the proposal, and a final decision may be taken soon. Sources said DIPAM wants to announce the decision much before financial bids open for BPCL disinvestment.

The government has decided to sell its 52.98 percent stake in BPCL, and several bidders have expressed interest. Now the government is in the process of issuing financial bids.