Course summary (Foreign direct investment (FDI) in India):
The sole and huge geography of India, gifted with different topography, has made
it one of the most attractive Foreign direct investment (FDI) destinations in the world.
It has become a global resource for various manufacturing and services
industry.
With the biggest area of arable land, India is one of the
biggest
food producers of the world. India is the biggest manufacturer of milk, sugarcane and tea as
well as the 2th biggest manufacturer of rice, fruit and vegetables.
The pool of technical human resources base of India with an increasing disposable
revenue and its burgeoning market have all combined to enable India emerge as a
viable partner to global
industry. India is the preferred hotspot for
organizations keen to outsource their R and D activities, software
development work, customer contact centers or Information technology (IT) enabled business processes.
The top sectors attracting highest Foreign direct investment (FDI) inflows into
India are: electrical equipments, services sector (financial and non financial), telecommunications, transportation industry, fuels, chemicals, construction activities, drugs and
pharmaceuticals, food processing, cement and gypsum products. Huge investment potential exists in the upcoming Knowledge Process Outsourcing (KPO) sector and
the real estate industry.
Thus, India is one of the few markets in the world which offers high
forecasts for growth and earning potential in practically all fields of business, particularly in tourism, Information technology (IT) and agricultural sector.
New Delhi, Mumbai, Bangalore, Gujarat, Andhra Pradesh
and Chennai are the main destintation for
Foreign direct investment (FDI) inflows. Maharashtra and the National Capital
Region accounted by more 50% of Foreign direct investment inflows
into India for the period of the 1st half of 2010-11
Example of the course Foreign direct investment (FDI) in India:
India is in the global arena for augmented Foreign direct investment (FDI) termed foreign Institutional Investment (FII) - and Foreign direct investment (FDI). While its
size and growth potential make India attractive as a market, the most compelling
reason for investors to be in India is that it provides a high Return on
Investment (ROI). India is a free market democracy with a legal and regulatory
framework that rewards free enterprise, entrepreneurship and risk taking.
Foreign direct investment (FDI) is welcome in nearly all the areas, excluding
those of strategic concern (for instance, defense and atomic energy) and usually
100% Foreign direct investment under automatic route is permitted. In such a changed investment climate, India is offering attractive business opportunities in virtually every sector of
the economy.
The Government has recently passed a Special Economic Zones (SEZs) Bill. SEZs
are treated as deemed foreign territory with no
import or export tariffs and
widespread periods for waiver of income taxes. Fourteen SEZs have been set up and
many more are in the pipeline. Legislation on Intellectual Property Rights (IPRs)
has been adopted by the Parliament of India.
All IPR laws are TRIPS (Trade Related Aspects of Intellectual Property Rights) compliant with a
completely
functional Intellectual Property Appellate Tribunal. In order to promote flow
of investment into India, the Government of India has set up several
investments facilitation agencies, which include:
- Foreign direct investment (FDI) Promotion Board (FIPB)
- Foreign direct investment Implementation Authority (FIIA)
- Investment Commission (IC)
- Secretariat for Industrial Assistance (SIA)
- India Brand Equity Foundation (IBEF)
Foreign direct investment (FDI) Procedures
Foreign corporate and individual investment in India, termed
as Foreign direct investment (FDI) when it relates to control or
ownership of a company in India, takes 1 of 2 routes:
A- Automatic route or Automatic Approval:
This requires no prior approval for
Foreign direct investment (FDI). Post-facto filing of data relating
to the investment made with the Reserve Bank of India (RBI) are for record
and data goals.
B- FIPB Approval - the foreign Investment Promotion Board (FIPB)
approves investment proposals:
- where the proposed shareholding is above the prescribed sector caps, or
- where the activity belongs to that small list of sectors where
Foreign direct investment (FDI) is
either not allowed or where it is mandatory that proposals be routed through
the FIPB (sectors that require industrial licensing, for example)
The FIPB
guarantees a single-window approval for the investment and acts as a
screening agency (for sensitive/negative list sectors). FIPB approvals (or
rejections) are normally received in 30 days. Some foreign investors use the FIPB application route where there may be absence of stated policy or lack
of policy clarity.
Sectors where Foreign direct investment (FDI) is not allowed are limited to Railways, Atomic
Energy and Atomic Minerals, Postal Service, Gambling and Betting, Lottery
and basic Agriculture or plantations.
A foreign company planning to set up business operations in India has the following options:
Incorporate a company under the Companies Act, 1956 through:
- Joint Venture or
- Wholly owned affiliated company
Foreign equity in such Indian companies can be up to 100% depending on the
requisites of the investor, subject to equity caps in respect of the sector/area of activities under the FDI policy.
- Enter as a Foreign Company through:
- Liaison Office/Representative Office
- Project Office
- Branch Office
Economy of India - States of India and Union Territories - Delhi - Bangalore - Mumbai - Andhra Pradesh - Gujarat - Haryana - India's Free trade agreements
EENI in Hindi: मास्टर विदेश पार
