- Through financial collaborations.
- Through joint ventures and technical collaborations.
- Through capital markets via Euro issues.
- Through private placements or preferential allotments.
Foreign Direct Investment-Introduction
Foreign Direct Investment (FDI) is permited as under the
following forms of investments.
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Forbidden Territories:
FDI is not permitted in the following industrial sectors:
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Foreign Investment through GDRs (Euro Issues)
Foreign Investment through GDRs is treated as Foreign Direct Investment
Indian companies are allowed to raise equity capital in the international market
through the issue of Global Depository Receipt (GDRs). GDRs are designated in
dollars and are not subject to any ceilings on investment. An applicant company
seeking Government's approval in this regard should have consistent track record
for good performance (financial or otherwise) for a minimum period of 3 years.
This condition would be relaxed for infrastructure projects such as power
generation, telecommunication, petroleum exploration and refining, ports,
airports and roads.
Clearance from FIPB
There is no restriction on the number of Euro-issue to be floated by a company
or a group of companies in the financial year . A company engaged in the
manufacture of items covered under Annex-III of the New Industrial Policy whose
direct foreign investment after a proposed Euro issue is likely to exceed 51% or
which is implementing a project not contained in Annex-III, would need to obtain
prior FIPB clearance before seeking final approval from Ministry of Finance.
Use of GDRs
The proceeds of the GDRs can be used for financing capital goods imports,
capital expenditure including domestic purchase/installation of plant, equipment
and building and investment in software development, prepayment or scheduled
repayment of earlier external borrowings, and equity investment in JV/WOSs in
India.
Restrictions
However, investment in stock markets and real estate will not be permitted.
Companies may retain the proceeds abroad or may remit funds into India in
anticiption of the use of funds for approved end uses. Any investment from a
foreign firm into India requires the prior approval of the Government of India
fDi Markets tracks the following information on India:
PM&P is one of Europe‘s most experienced consulting and marketing support companies for Investment Promotion Agencies. PM&P can build on a 30-years-track-record in attracting foreign direct investment for agencies worldwide.
• PM&P‘s mix of state-of-the-art marketing instruments, has been brought to perfection during these decades.
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• Among the clients are IPAs of States, Regions and Cities worldwide, but also sites, like Business Parks, Free Trade Zones, Export Processing Zones, Airports, Harbours, etc.