Invest in India
Why Invest in India
India is today one of the six fastest growing economies of the world. The country ranked fourth in terms of Purchasing Power Parity (PPP) in 2001. The business and regulatory environment is evolving and moving towards constant improvement. A highly talented, skilled and English-speaking human resource base forms its backbone.
The Indian economy has transformed into a vibrant, rapidly growing consumer market, comprising over 300 million strong middle class with increasing purchasing power. India provides a large market for consumer goods on the one hand and imports capital goods and technology to modernize its manufacturing base on the other.
An abundant and diversified natural resource base, sound economic, industrial and market fundamentals and highly skilled and talented human resources, make India a destination for business and investment opportunities with an assured potential for attractive returns.
Far-reaching measures introduced by the government over the past few years to liberalise the Indian market and integrate it with the global economy are widely acknowledged. The tenth five year plan document targets a healthy growth rate of 8% for the Indian economy during the plan period 2002–07.
- India is the fourth largest economy in the world, and has the second largest GDP among developing countries, based on purchasing power parity.
- Strategic location - On the crossroads between the Middle East with its rich oil supplies and the rapidly growing economies in the Far East.
- Its 300 million strong middle class consumer market is the target for some of the world's biggest names for branded consumer goods.
- The market for consumer goods is estimated to be growing at 8% per annum.
- There are only 214 cars for every thousand Indian families, 169 refrigerators and 81washing machines indicating a virgin market waiting to be explored.
- Foreign investment is welcome, approval in some cases is required but is automatic in sixty categories of Industries.
- Skilled man-power and professional managers are available at competitive cost.
- India's large pool of scientific and engineering talents, second largest in the world, makes it an ideal place for knowledge based industries.
- Its IT and IT-enabled industries are already seen as a key source for quality infotech services to the world.
- It has one of the largest manufacturing bases in the world, spanning almost all areas of manufacturing activities, supported by a huge base of mineral and farm resources.
- Sound, sophisticated and modern financial sector with a 250 year history of stability.
- Vibrant capital market with over 9,000 listed companies.
- Enterprises have freedom of entry, investment, location, choice of technology, production, import and export.
- Well balanced package of fiscal incentives offered by both Federal (also called Central) and state governments.
- Established rule of the law with independent legal infrastructure.
- A sophisticated accounting system.
- English is the language for business communication and is understood in almost all parts of the country.
- Rupee is convertible on Current Account at market determined rate.
- Free and full repatriation of capital, technical fee, royalty and dividends.
- Foreign brand names are freely used. No income tax on profits derived from export of goods.
- Complete exemption from Customs Duty on industrial inputs and Corporate Tax Holiday for five years for 100 per cent Export Oriented units and units in Export Processing Zones.
- Corporate Tax applicable to the foreign companies of a country with which agreement for avoidance of Double Taxation exists, can be one which is lower between the rates prevailing in any one of the two countries and the treaty rate.
- Long history of being the only stable parliamentary democracy in the entire region.
The Indian Market
One of the important factors for the strong interest of foreign investors in India is the size and the potential for growth of the domestic market. Marked sociological changes brought about by rapid urbanisation, explosion of the electronic media, education and increasing domestic and foreign travel are changing the nature and composition of expenditure, with growing emphasis on brands, product quality, features and convenience.
The vast and growing Indian market is a reality. The increase in the number of households headed by salary earners, professionals and businesspersons, along with the emergence of a thriving consumer finance business, have led to a steep rise in the number of consumers with greater disposable incomes. Expenditure on consumer durables like washing machines, refrigerators and colour televisions has shown an impressive growth during the 1990s. Private consumption expenditure in services such as hotels and restaurants, home products like furniture and furnishings, consumer durables and personal transport has been steadily increasing, making India one of the larger consumers of white goods as also in the Fast Moving Consumer Goods (FMCG) segment. India offers one of the largest markets in the world for manufactured items of mass consumption such as clothing, footwear, detergents, cooking oil, etc. Markets for most manufactured products have exhibited strong growth rates over the past few years.
Rural areas, where over 70% of Indians live, have witnessed rapid market growth in recent times, driven largely by agricultural growth, income redistribution, and inroads made by the audio-visual media. The rural share of the market for durable goods has grown steadily over the last few years. The rural consumer in India does not limit himself to basic goods, and has been increasingly known to patronise goods earlier assumed to be higher up in the consumer chain, with white goods being a priority, and personal vehicles consumption also showing an upturn.
India has an extensive sales and distribution network. It is estimated that there are over one million market intermediaries - wholesalers, stockists' transporters and retailers - involved in the distribution of a variety of consumer goods. Marketers use this network to access nearly 3,800 cities and towns and over half a million villages. While urban areas have a range of distribution outlets, from large supermarkets and superstores to the smaller neighbourhood retail stores, small shops that are part of the local supply network cater to almost every village in India.
The widespread sales and distribution network is supported by an equally extensive banking network. Consumer financing is an accepted form of consumer goods marketing in India. The presence of several non-banking finance companies engaged in leasing and hire purchase activities has given a fillip to consumer goods sales. The credit card market too has shown tremendous growth in recent years. The products of several international companies like Diners Club, Visa International, Master Card and American Express Bank are widely used in the country along with the cards offered by several domestic banks.
The Indian Economy
The Indian economy has, since 1991, undergone profound changes not only in its direction, but also its fundamental structures and underpinnings. The deliberate change from a command economy based on a socialist market model to that of a market economy with a human face has led to major readjustments. As a result, there has been greater reliance on technology, improvement of systems, streamlining of procedures relating to approvals, and general reduction in the involvement of the government in the business of running businesses. These changes have been reflected across the Indian economic landscape, resulting in a faster growing economy, with increasingly stable fundamentals. At the same time, the economy has also been able to integrate itself into the global economic mainstream, with participation in global multilateral institutions, and a willingness to accept new ideas and challenges.
Given below are some broad indicators of the Indian economy over the past few years, which provide some insight into the general direction of the economy, as well as the impact of the current and ongoing reforms
Population & National Income
Foreign Investment Policy
India's economic policies are designed to attract significant capital inflows into India on a sustained basis and to encourage technology collaboration between Indian and foreign firms. Policy initiatives taken over the last few years have resulted in significant inflows of foreign investment in diverse areas of the economy. As a matter of fact, a recent survey of how foreign direct investment and foreign companies in India have performed has come out with findings that 87% found growth conditions in India to be 'attractive' vis-à-vis other countries; 74% found profit levels to be 'average' to 'good'; 54% are planning to augment their Indian operations; and, 75% found the legal framework in India to be 'good'. An inter-country comparison showed that 66% found the performance of their Indian operations to be in the range of 'average' to 'good'; 97% found the quality and availability of manpower to be 'absolutely superb'; 71% found market penetration to be 'reasonably easy'; another 71% found it easy to have two-way flow of funds and profits. This proves that those who have invested in India have had positive experiences, and this has provided the grounds for optimism for the future. India welcomes direct foreign investment in virtually every sector, except those of strategic concern. Even in this, there have been recent changes, with private investment allowed to a limited degree in defence production, thus opening up an important area for cooperation.
Foreign Direct Investment
Under the foreign investment policy, two routes are available for foreign investors, depending upon the industry and the levels of investment contemplated. Additionally, another fast-track approach is now available through the mechanism of Special Economic Zones. Details of all these are given below -
Automatic Route
Companies proposing foreign investment under the automatic route do not require any Government approval, provided the requisite documents are filed with the Reserve Bank of India (RBI) within 30 days of receipt of funds. Some of the sectors recently shifted to the automatic route are given below, along with the FDI limits in them -
- 100% in drugs and pharmaceuticals compared to 74% earlier;
- 100% in hotels and tourism;
- 100% in courier services;
- 100% in the Mass Rapid Transit System (MRTS) in all major cities; and,
- 74% in airports.
- foreign investment limit in private banks has been raised to 74% under the automatic route to encourage foreign banks to set up subsidiaries in India,
Foreign Investment Promotion Board (FIPB)
All other proposals for foreign investment, which are not covered under the automatic approval route, are considered for approval, on merits, by the FIPB. Composite proposals, i.e. proposals seeking other industrial approvals like industrial licence, technical collaborations, etc. along with approval for foreign investment, are given a composite clearance by the FIPB. Further, foreign financial/ technical collaborators with previous ventures/tie-up in India also have to apply to the FIPB for approval for setting up any new venture. All proposals for raising foreign equity or inducting new foreign equity in existing companies would need to be accompanied by a Resolution of the Board of Directors of the existing company and a consent letter from the Indian partner/ foreign collaborator.
The current liberalisation has included changes in the following sectors for FIPB approval
- 100% in airports;
- 26% in the defence sector;
- 49% in banking subject to approval by the Reserve Bank of India (RBI); and,
- 76% in some areas of the telecom sector, particularly Internet Service Providers, Internet Gateways, Radio Paging Services and end-to-end bandwidth services.
Special Economic Zones
In order to provide an internationally competitive environment to businesses, the Government of India has decided to set up Special Economic Zones (SEZ) in selected areas. SEZs can be set up in the public, private, joint sector or by the State Governments, with the minimum size of the SEZ fixed at 1000 hectares. These zones will have world-class infrastructure, and help promote export-oriented businesses.
The main benefits for those setting up SEZs in India include -
- No license required for import.
- Exemption from custom duty on import of capital goods, raw materials, consumables etc.
- Exemption from Central Excise Duty on procurement of capital goods, raw materials etc. from the domestic market.
- SEZ units have to be a net foreign exchange earner. No pre-determined foreign exchange earning or minimum performance requirement.
- Access to domestic market.
- Simplified Custom procedure.
- Trading activity for exports permitted.
- Fast track clearance of imports and exports.
- Ready infrastructure.
- No separate documentation required under Customs and Exim Policy.
- 100% FDI permissible for units in SEZs in manufacturing sector except few specified areas.
- No cap on foreign investment for SSI reserved items.
- Profits allowed to be repatriated freely without any dividend-balancing requirement.
- 70% of foreign exchange earnings can be retained in EEFC account.
- Attractive tax holiday upto 2010 as per Section 10A of the Income Tax Act.
Industry
Since 1991, the industrial sector has witnessed positive structural changes, improvements in productivity, modernisation and infusion of new technology. Companies have consolidated their areas of core competence, while several have tied up with foreign companies to acquire new technologies, management expertise and access to foreign markets. The Government has taken steps to put the industrial sector on an accelerated growth path. Steps taken include a cut in personal and corporate income tax rates, modification of the excise and customs duties to revive the manufacturing sector and further deregulation of interest rates with greater freedom to banks to assess credit requirements. The corporate sector was also allowed free access to GDR/ECB windows to obtain finance at globally competitive rates. Furthermore, the Government has decided to increase spending on infrastructure to kick-start the economy and has announced several measures to increase investment in the sector. The software industry in particular has shown great promise and is amongst the fastest growing sectors with an average growth of well over 50% over the last 5 years.
Infrastructure
Infrastructure development has traditionally been reserved for the public sector. However, recognising the need for rapid growth and improvement in the quality of infrastructural facilities, private and foreign participation is being encouraged through a package of attractive incentives. Infrastructure sector is being given a concerted push, with the aim of providing an international level of infrastructure to India within a specified time frame. Towards this end, a number of incentives have been offered, and the following areas specific to infrastructure have undergone major revision of rules to make it easier for foreign investors to come into India -
Roads and Highways
An integrated National Highways Development Plan has been put in place. This envisages the construction of 87,000 km of highways and roads, including 13,000 km of expressways and highways to international standards. This is estimated to call for an investment of US$ 27 billion till the year 2006. The most ambitious part of this is the Golden Quadrilateral scheme, under which expressways will connect the four metropolitan cities of India -New Delhi, Mumbai, Kolkata and Chennai. This scheme is already under way, and contracts for some stretches have been awarded. Other contracts are to be finalised soon, with completion planned by the end of 2003.
For greater details, please visit the website of the National Highways Authority of India, www.nhai.org
Electricity and Power
The power situation in India is one of supply not keeping up with demand, and huge investments in the power sector are envisaged over the next few years. As per present estimates, investments needed in the power sector over the next five years would amount to US$ 178 billion, for creating facilities for the generation of 1,11,500 MW of electricity.
The institutional framework in place for the power sector includes the following -
Central Electricity Authority: Responsible for developing a sound, adequate, uniform policy for control and utilisation of national power resources.
State Electricity Boards (SEBs): Constituted by the State Governments, SEBs have the broad function of generating, transmitting and distributing electricity in coordination with generating companies, the Government and any relevant agency. Some States have restructured their SEBs into generation and transmission companies.
Central and State Electricity Regulatory Commissions: Responsible for defining policies on subsidies and promoting efficient and environment friendly policies.
Power Grid Corporation of India: Responsible for evacuating power from central generating stations, inter-state transmission lines, formation of National Grid and operation of regional load dispatch centres. Other government agencies include the National Thermal Power Corporation (NTPC) and the Nuclear Power Corporation that are responsible for thermal and nuclear power generation respectively.
Telecommunications
In the telecom sector, there is currently a shortfall of nearly 52 million lines, which need to be added on to the existing network of 22.64 million lines. These, as well as other projects, offer the opportunity for investment of US$ 55 billion. The telecom sector is one of the fast growing sectors in India, with potential for investment as India moves to strengthen its digital and telecom networks to move up the connectivity ladder over the next few years.
The institutional framework within which the telecom sector functions consists of the following -
Telecom Commission: Responsible for formulation of policies, operation, maintenance and development of telecom services and preparation of budgets, supervision of policy implementation, plans and controls.
Telecom Regulatory Authority of India (TRAI): Set up in 1997, TRAl's functions include effective interconnection between different operators and service providers, protection of consumer interests, ensuring compliance of licence conditions by all service providers, dispute settlement between the DoT and service providers.
Department of Telecommunications (DoT): Responsible for the provision of voice and non-voice telecom services throughout India, with the exception of Delhi and Mumbai In addition to the above, the Mahanagar Telephone Nigam Limited (MTNL) offers basic telecom services in Delhi and Mumbai, and the Videsh Sanchar Nigam Limited (VSNL) provides international telecom services in India.
Financial Sector
A strong and vibrant financial and banking sector supports the growing Indian economy. There exists an extensive commercial banking network of over 63,000 branches, including over 150 branches of foreign banks. The sector also has a number of national and state level financial institutions, a large number of domestic and foreign institutional investors, investment funds, equipment leasing companies, venture capital companies, etc. Banks and financial institutions in India observe the highest international norms, they have adopted the international best practices. Further, the country has a well-established stock market comprising 22 stock exchanges, with over 9,000 listed companies. Figures in the table below give an idea of the movements in the capital markets of India over the past few years -
Ports
India is looking to increase its exports, and therefore needs world-class ports to handle the anticipated increase in traffic. Towards this end, a conscious decision has been taken to go in for major changes in the way ports in India are operated. The emphasis now is on the corporatisation of ports, with the private sector expected to play an important role as government slowly eases away its heavy involvement. There are also ample opportunities by way of construction of ports, and running them. The investments foreseen till the year 2006 are in the range of US$ 8 billion, with most expected to come from foreign investors with experience and expertise in handling international ports.
Electronics and Information Technology
Information Technology (IT) has emerged over the past decade as one of the strongest areas of business to come out of India. An important part of the 'knowledge industry', IT in India has progressed by leaps and bounds, to establish India as an important centre for development of software solutions, as well as one of the most cost-efficient places for back office operations globally. The government has taken a number of measures to promote investment into this industry, including automatic approval for foreign equity in the software and electronics fields, automatic approval accorded for foreign technology agreements in all areas of electronics except aerospace and defence, subject to specified conditions
As for the institutional framework for the ports sector, the primary responsibility for the development and management of major ports rests with the Central Government. Administration of minor ports is the responsibility of the State Government. Individual Ports Trusts are responsible for the administration, control and management of major ports. The power to fix and revise tariffs has been entrusted to an independent authority, the Tariff Authority for Major Ports The tariff fixed by the authority shall be a ceiling and the developer shall be free to charge less than the notified tariff.
Sector Specific Guidelines For Foreign Direct Investment
| Sector |
Guidelines |
| Banking |
NRI holding may be upto 40%, inclusive of equity participation by other foreign investors. Foreign investment of upto 20% is permitted by foreign banking companies or finance companies including multilateral financial institutions. Multilateral institutions are allowed to invest within the overall foreign direct investment cap of 40% in case of shortfall in foreign direct investment contribution by NRIs. |
| Non Banking Financial Companies (NBFC) |
a) The automatic route is not available.
FDI/NRI/OCB investments allowed in the following 18 NBFC activities shall be as per levels indica
- Merchant banking
- Underwriting
- Portfolio Management Services
- Investment Advisory Services
- Financial Consultancy
- Stock Broking Asset Management
- Venture Capital
- Custodial Services
- Factoring
- Credit Reference Agencies
- Credit rating Agencies
- Leasing & Finance
- Housing Finance
- Forex Broking
- Credit card business.
- Money changing Busine .
- Micro Credit
- Rural Credit
b) Minimum Capitalisation Norms for fund based NBFCs:
For FDI UPTO 51% - US$ 0.5 million to be brought upfront
For FDI above 51% and upto 75% - US $ 5 million to be brought upfront
For FDI above 75% and upto 100% - US $ 50 million out of which US $ 7.5 million to be brought upfront and the balance in 24 months
100% NBFC Holding Company with a minimum capital of US $ 50 million allowed to set up a 100% downstream subsidiary to undertake specific NBFC activities. Such a subsidiary, however, could be required to dis-invest its equity to the minimum extent of 25%, through a public offering only, within a period of three years.
c) Minimum capitalisation norms for non-fund based activities:
Minimum capitalisation norm of US $ 0.5 million is applicable in respect of all permitted non-fund based NBFCs with foreign investment.
The automatic route is not available. |
| Civil Aviation (detailed guidelines have been issued by Ministry of Civil Aviation) |
In the domestic Airlines sector:
- FDI upto 40% permitted subject to no direct or indirect equity participation by foreign airlines is allowed.
- 100% investment by NRIs/OCBs.
- The automatic route is not available.
|
| Telecommunication |
a) In basic, Cellular Mobile, paging and Value Added service, and Global Mobile Personal Communications by Satellite, FDI is limited to 49% subject to grant of licence from Department of Telecommunications and adherence by the companies (who are investing and the companies in which investment is being made) to the licence conditions for foreign equity cap and lock in period for transfer and addition of equity and other licence provisions.
b) No equity cap is applicable to manufacturing activities.
c) FDI upto 100% is allowed for the following activities in the telecom sector :
- ISPs not providing gateways (both for satellite and submarine cables);
- Infrastructure Providers providing dark fibre (IP Category 1);
- Electronic Mail; and
- Voice Mail
The above would be subject to the following conditions:
- -FDI upto 100% is allowed subject to the condition that such companies would divest 26% of their equity in favour of Indian public in 5 years, if these companies are listed in other parts of the world.
- The above services would be subject to licensing and security requirements, wherever required.
- Proposals for FDI beyond 49% shall be considered by FIPB on case to case basis.
|
| Petroleum (other than Refining) |
- ISPs not providing gateways (both for satellite and submarine cables);
- For petroleum products and pipeline sector, FDI is permitted upto 51%.
- FDI is permitted upto 74% in infrastructure related to marketing and marketing of petroleum products.
- 100% wholly owned subsidiary(WOS) is permitted for the purpose of market study and formulation.
- 100% wholly owned subsidiary is permitted for investment/Financing.
- For actual trading and marketing, minimum 26% Indian equity is required over 5 years.
The automatic route is not available.
- FDI is permitted upto 26% in case of public sector units(PSUs). PSUs will hold 26% and balance 48% by public.Automatic route is not available.
- In case of private Indian companies, FDI is permitted upto 100% under automatic route.
|
| Housing & Real Estate |
No foreign investment is permitted in this sector. NRIs/OCBs are allowed to invest. The scheme specific to NRIs and OCBs covers the following:
- Development of serviced plots and construction of built up residential premises
- Investment in real state covering construction of residential and commercial premises including business centres and offices
- Development of townships
- City and regional level urban infrastructure facilities, including both roads and bridges
- Investment in manufacture of building materials
- Investment in participatory ventures in (a) to (e) above
- Investment in housing finance institutions
|
| Coal and Lignite |
- Private Indian companies setting up or operating power projects as well as coal or lignite mines for captive consumption are allowed FDI upto 100%.
- 100% FDI is allowed for setting up coal processing plants subject to the condition that the company shall not do coal mining and shall not sell washed coal or sized coal from its coal processing plants in the open market and shall supply the washed or sized coal to those parties who are supplying raw coal to coal processing plants for washing or sizing.
- FDI upto 74% is allowed for exploration or mining of coal or lignite for captive consumption.
- In all the above cases, FDI is allowed upto 50% under the automatic route subject to the condition that such investment shall not exceed 49% of the equity of a PSU.
|
| Venture Capital Fund(VCF) and Venture Capital Company(VCC) |
An offshore venture capital company may contrinute upto 100% of the capital of a domestic venture capital fund and may also set up a domestic asset management company to manage the fund.
VCFs and VCCs are permitted upto 40% of the paid up corpus of the domestic unlisted companies. This ceiling would be subject to relevant equity investment limit in force in relation to areas reserved for SSI. Investment in a single company by a VCF/VCC shall not exceed 5% of the paid-up corpus of a domestic VCF/VCC.
The automatic route is not available.
(a) Offshore Venture Capital Funds/Companies are allowed to invest in domestic venture capital undertakings as well as other companies through the automatic route, subject only to SEBI regulations and sector specific caps on FDI. |
| Trading |
Trading is permitted under automatic route with FDI upto 51% provided it is primarily export activities, and the undertaking is an export house/trading house/super trading house/star trading house. However, under the FIPB route:-
- 100% FDI is permitted in case of trading companies for the following activities:
- exports;
- bulk imports with export/ex-bonded warehouse sales;
- cash and carry wholesale trading;
- other import of goods or services provided at least 75% is for procurement and sale of goods and services among the companies of the same group and for third party use or onward transfer/distribution/sales.
The following kinds of trading are also permitted, subject to provisions of EXIM Policy:
- Companies for providing after sales services (that is no trading per se)
- Domestic trading of products of JVs is permitted at the wholesale level for such trading companies who wish to market manufactured products on behalf of their joint ventures in which they have equity participation in India.
- Trading of hi-tech items/items requiring specialised after sales service
- Trading of items for social sector
- Trading of hi-tech, medical and diagnostic items.
- Trading of items sourced from the small scale sector under which, based on technology provided and laid down quality specifications, a company can market that item under its brand name.
- Domestic sourcing of products for exports.
- Test marketing of such items for which a company has approval for manufacture provided such test marketing facility will be for a period of two years, and investment in setting up manufacturing facilities commences simultaneously with test marketing.
- FDI upto 100% permitted for e-commerce activities subject to the condition that such companies would divest 26% of their equity in favour of the Indian public in five years, if these companies are listed in other parts of the world. Such companies would engage only in business to business (B2B) e-commerce and not in retaiol trading.
|
| Investing companies in infrastructure/ service sector |
In respect of the companies in infrastructure/service sector, where there is a prescribed cap for foreign investment, only the direct investment will be considered for the prescribed cap and foreign investment in an investing company will not be set off against this cap provided the foreign direct investment in such investing company does not exceed 49% and the management of the investing company is with the Indian owners. The automatic route is not available. |
| Atomic energy |
The following three activities are permitted to receive FDI/NRI/OCB investments through FIPB (as per detailed guidelines issued by Department of Atomic Energy vide Resolution No.8/1(1)/97-PSU/1422 dated 6.10.98):
- Mining and mineral separation
- Value addition per se to the products of (a) above
- Integrated activities (comprising of both (a) and (b) above.
The following FDI participation is permitted:
- Upto 74% in both pure value addition and integrated projects.
- For pure value addition projects as well as integrated projects with value addition upto any intermediate stage, FDI is permitted upto 74% through joint venture companies with Central/State PSUs in which equity holding of at least one PSU is not less than 26%.
- In exceptional cases, FDI beyond 74% will be permitted subject to clearance of the Atomic Energy Commission before FIPB approval.
|
| Defence and strategic industries |
No FDI/NRI/OCB investment is permitted |
| Agriculture (including plantation) |
No FDI/NRI/OCB investment is permitted |
| Print media |
No FDI/NRI/OCB investment is permitted |
| Broadcasting |
No FDI/NRI/OCB investment is permitted |
| Power |
Upto 100% FDI allowed |
| Drugs & Pharmaceuticals |
FDI upto 74% in the case of bulk drugs, their intermediates and formulations (except those produced by the use of recombinant DNA technology) would be covered under automatic route.
FDI above 74% for manufacture of bulk drugs will be considered by the Government on case to case basis for manufacture of bulk drugs from basic stages and their intermediates and bulk drugs produced by the use of recombinant DNA technology as well as the specific cell/tissue targeted formulations provided it involves manufacturing from basic stage. |
| Roads & Highways, Ports and Harbours. |
FDI upto 100% under automatic route is permitted in projects for construction and maintenance of roads, highways, vehicular bridges, toll roads, vehicular tunnels, ports and harbours. |
| Hotels & Tourism |
100% FDI is permissible in the sector.
The term hotels include restaurants, beach resorts, and other tourist complexes providing accommodation and/or catering and food facilities to tourists. Tourism related industry includes travel agencies, tour operating agencies and tourist transport operating agencies, units providing facilities for cultural, adventure and wild life experience to tourists, surface, air and water transport facilities to tourists, leisure, entertainment, amusement, sports, and health units for tourists and Convention/Seminar units and organisations.
Automatic route is available upto 51% subject to the following parameters.
For foreign technology agreements, automatic approval is granted if
- upto 3% of the capital cost of the project is proposed to be paid for technical and consultancy services including fees for architects, design, supervision, etc.
- upto 3% of net turnover is payable for franchising and marketing/publicity support fee, and
- upto 10% of gross operating profit is payable for management fee, including incentive fee.
|
| Mining. |
- For exploration and mining of diamonds and precious stones FDI is allowed upto 74% under automatic route.
- For exploration and mining of gold and silver and minerals other than diamonds and precious stones, metallurgy and processing FDI is allowed upto 100% under automatic route.
- Press Note No. 18 (1998 series) dated 14.12.98 would not be applicable for setting up 100% owned subsidiaries in so far as the mining sector is concerned, subject to a declaration from the applicant that he has no existing joint venture for the same area and / or the particular mineral.
|
| Postal services |
Couriers carrying packages, parcels and other items which do not come within the ambit of Indian Post Office Act 1998 shall not be permitted. |
| Pollution Control and management |
FDI upto 100% in both manufacture of pollution control equipment and consultancy for integration of pollution control systems is permitted under automatic route. |
| dvertising and films |
Automatic approval is available for the following:
- Upto 74% FDI in advertising sector
- Upto 100% FDI in film industry (i.e. film financing, production, distribution, exhibition, marketing and associated activities relating to film industry) subject to the following:
- Companies with an established track record in films, TV, music, finance and insurance would be permitted.
- The company should have a minimum paid up capital of US $ 10 million if it is the single largest equity shareholder and at least US $ 5 million in other cases.
- Minimum level of foreign equity investment would be US $ 2.5 million for the single largest equity shareholder and US $ 1 million in other cases.
- Debt equity ratio of not more than 1:1, i.e., domestic borrowings shall not exceed equity.
|
Some Important Addresses
Joint Secretary (IPP),
Ministry of External Affairs,
South Block,
New Delhi-110011.
Tel.: 3014367/301 8709
Fax: 379 2B14, 301 4367 |
Joint Secretary (Refineries)
Ministry of Petroleum
Shastri Bhavan, New Delhi.
Tel.: 338 1832
Fax: 338 3585 |
Joint Secretary
Secretariat for Industrial Assistance (SIA)
Department of Industrial Development
Ministry of Industry
Udyog Bhavan
New Delhi - 110 011
Tel.: 91-11-301 1983
Fax: 91-11-301 1034 |
Joint Secretary (Exploration)
Ministry of Petroleum and Natural Gas
Shastri Bhavan
Dr. Rajendra Prasad Marg.
New Delhi - 110 001
Tel.: 3386935
Fax: 3386479 |
Foreign Investment Promotion Board (FIPB)
Ministry of Industry
New Delhi - 110 011.
Tel.: 91-11-301 1815, 301 1983
Fax: 91-11-301 6298 |
Joint Secretary (Marketing)
Ministry of Petroleum and Natural Gas
Shastri Bhavan
Dr. Rajendra Prasad Marg
New Delhi - 110 001.
Tel.: 91-11-381 052
Fax: 91-11-384 787 |
Joint Secretary
Investment Promotion Cell
Ministry of Power
Shram Shakti Bhawan, Rafi Marg
New Delhi - 110 001..
Tel.: 91-11-3714842
Fax: 91 -11 -3717519 |
Joint Secretary(A)
Ministry of Civil Aviation
B Block, Rajiv Gandhi Bhavan
Safdarjung Airport
New Delhi - 110 003.
Tel.: 461 0369
Fax: 461 0354 |
Joint Secretary
Ministry of Telecommunication
Sanchar Bhavan
New Delhi.
Tel.: 371 7413
Fax: 371 1514 |
Joint Secretary
Ministry of Steel & Mines
Deptt. of Mines, Udyog Bhavan
New Delhi.
Tel.: 338 4741
Fax: 338 6402 |
Director General (Roads)
Ministry of Surface Transport
Transport Bhavan
1, Sansad Marg,
New Delhi - 110 001.
Tel.: 91-11-371 5159
Fax: 91-11-371 0236 |
Joint Secretary
Deptt. of Electronics
Electronic Niketan, CGO Complex
New Delhi - 110 003
Tel.: 436 3078
Fax: 436 3101 |
Joint Secretary (Ports)
Ministry of Surface Transport
Transport Bhavan
Sansad Marg,
New Delhi.
Tel.: 371 1873
Fax: 332 8549 |
Joint Secretary (Pl)
Ministry of Chemicals
Shastri Bhavan
Dr. Rajendra Prasad Marg
New Delhi - 110 001.
Tel.: 91-11-3385131
Fax: 91-11-3382294 |
Joint Secretary (Shipping)
Transport Bhavan
1, Sansad Marg,
New Delhi - 110 001.
Tel.: 91-11-371 0189
Fax: 91-11-372 2855 |
Joint Secretary
Ministry of Food Processing
Panchsheel Bhawan
Khel Gaon Marg
New Delhi - 110 049
Tel.: 91-11-694 2476, 649 2475
Fax: 91-11-649 3228 |
Joint Secretary (UD)
Ministry of Urban Affairs & Employment
Deptt. of Urban Development
Nirman Bhavan
New Delhi.
Tel.: 301 2309
Fax: 301 4459 |
Additional Director General
Department of Tourism
Transport Bhawan
1, Sansad Marg
New Delhi - 110 001.
Tel.: 91-11-371 5717
Fax: 91-11-371 0518 |
Reserve Bank of India (RBI)
Exchange Control Department
Central Office Building
Shaheed Bhagat Singh Road
PB No. 1055
Mumbai - 400 023.
Tel.: 91-22-266 3596
Fax: 91-22-266 5330, 266 2105, 265 4121 |
Director General, Foreign Trade
(DG FT)
Udyog Bhavan
New Delhi - 110 001.
Tel.: 91-11-301 1777
Fax: 91 -11 -301 1779 |
Chief Commissioner (Investment and NRIs)
India Investment Centre (IIC)
Jeevan Vihar, Sansad Marg
New Delhi - 110 001.
Tel.: 91-11-373 3673, 373 3679
Fax: 91-11-373 3712, 373 2245 |
Export Import Bank of India (EXIM)
PB 16100, Centre One
World Trade Centre, Cuffe Parade
Mumbai - 400 005.
Tel.: 91-22-218 5272, 218 2255
Fax: 91-22-218 2690 |
Confederation of Indian Industry (CII)
Business, Development Cell
23, Institutional Area, Lodi Road
New Delhi - 110 003.
Tel.: 4647506, 4626285
Fax: 4626311, 467444 |
Federation of Indian Chamber of Commerce and Industry (FICCI)
Investor Guidance Services
Federation House, Tansen Marg
New Delhi.
Tel.: 3738760-70
Fax: 3320714, 3721504 |
The Associated Chambers of Commerce and Industries of India (ASSOCHAM)
2nd Floor, Allahabad Bank Building
17, Parliament Street
New Delhi - 110 001.
Tel.: 3360704 / 0749
Fax: 3342193, 3734917 |
The Development Commissioner
Cochin Export Processing Zone
Kakkanad
Cochin 682 030
Tel.: 91-484-422 571
Fax: 91-484-422 530 |
The Development Commissioner
Noida Export Processing Zone
Noida Dadri Road
Phase II
Noida - 201 305
Tel.: 91-11-856 7270--73 (4 lines)
Fax: 91-11-856 2314 |
The Development Commissioner
Kandla Free Trade Zone
Kandla
Gandhidham - 370 230.
Tel.: 91-2836-52194, 52475, 52229
Fax: 91-2836 52250 |
The Development Commissioner
Madras Export Processing Zone
GST Road, N.H. 45, Tambaram
Chennai - 600 045
Tel.: 91-44-236 8232, 236 8200
Fax: 91-44-236 8218, 236 8291 |
The Development Commissioner
Santa Cruz Export Processing Zone
Andheri East
Mumbai - 400 096
Tel.: 91-22-836 7143
Fax: 91-22-837 6856 |
The Development Commissioner
Falta Export Processing Zone
2nd MSO Building, Room No. 4
Nizam Palace, 234/4
AJC Bose Road
Calcutta - 700 020
Tel.: 91-33-2472263, 2404092
Fax: 91-33-2477923 |
The Development Commissioner
Visakhapatnam Export Processing Zone
Udyog Bhawan Complex, Siripuram Junction
Visakhapatnam - 530 003
Tel.: 91-891-575449, 554577
Fax: 91-891-551259 |
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