.:: FDI (Foreign Direct Investment) in India 21 de junho 2001 ::.

FDI (Foreign Direct Investment) in India 21st june 2001

The Deptt of Industrial Policy and Promotion have issued a press release on 21 June, on their strategy to accelerate FDI inflows, which would include:

Secretariat for Industrial Assistance (SIA), which functions as the Secretariat for Foreign Investment Implementation Authority (FIIA), will contact all foreign investors who have obtained FIPB approvals to ascertain the progress of the implementation and the need, if any, of support in facilitating such implementation.
This contact would be initially at the operational levels and would be upgraded even to the Board levels, if so required, so that the investors at the highest corporate level become aware that Government of India is fully committed to ensuring that the FDI inflows into the country are smooth and implementation of projects is quick.
In the event of problems or difficulties coming to notice, the SIA will take up the matter with the appropriate Ministry/Agency or State Government and, where required, bring it before the FIIA or its Fast Track Committee.
FIIA will continue with greater vigour and frequency in its interaction with Ministries of the Central Government and State Governments.
A decision has recently been taken to involve the Indian Embassies abroad in monitoring the FDI cases emanating from their regions on behalf of FIIA. Follow up action on reports from Embassies would be taken by FIIA. The Embassies have also been authorised to accept FDI applications, in addition to the existing practice where applications can be sent directly to SIA either through conventional modes or even online through computers.
The SIA would adopt a sector-wise approach in pursuing FDI cases for more effective coordination with Administrative Ministries. In addition to this the current mechanism of reviewing mega projects and holding meetings on a region-wise basis and meetings with investors of specific countries e.g. USA, Japan, Germany etc. would also continue with greater frequency.

The key element of the strategy is closer and more sustained interaction with the investors on the one hand, with the relevant agencies of the Government and institutions on the other hand, to bring a much sharper focus on implementation, to supplement the far-reaching policy changes which have already been put in place.

The proposals for approval under the automatic route are to be made to the Reserve Bank of India in the FC(RBI) form. In a major drive to simplify procedures for foreign direct investment under the "automatic route", RBI has given permission to Indian Companies to accept investment under this route without obtaining prior approval from Reserve Bank of India. However, investors will have to file the required documents with the concerned Regional Office of the RBI within 30 days after issue of shares to foreign investors. This facility is available to NRI/OCB investment also.

(a) All other proposals for foreign investment, including NRI/OCB investment and foreign investment in EOU/EPZ/STP/EHTP units, which do not fulfil any or all of the parameters prescribed for automatic approval, as given in paragraph 2.8, 3.1, and 3.2 are considered for approval on merits by the Government. All such proposals are considered for approval by the Foreign Investmetn Promotion Board (FIPB). The FIPB also grants composite approvals involving foreign technical collaborations and setting up of Export Oriented Units involving foreign investment/foreign technical collaboration.

(b) Applications to FIPB for approval of foreign investment should be submitted in Form FC-IL( Annexure-VIII). Plain paper applications carrying all relevant details are also accepted. No fee is payable. The following information should form part of the proposal submited to FIPB:

(c) The application can be submitted with the EAU of the SIA, Department of Industrial Policy & Promotion, Ministry of Commerce & Industry, Udyog Bhavan, New Delhi - 110011. Applications can also be submitted with Indian Missions abroad who will forward them to the SIA for further processing.

(d) Foreign investment proposals received in the SIA are placed before the Foreign Investment Promotion Board (FIPB) within 15 days of its receipt. The Board has the flexibility of purposeful negotiation with the investors and considers project proposals in totality in order to ensure optimum foreign direct investment into the country. The recommendations of FIPB in respect of project proposals involving a total investment of up to Rs. 6 billion are considered and approved by the Industry Minister. Projects with a total investment exceeding Rs. 6 billion are submitted to the Cabinet Committee on Foreign Investment (CCFI) for decision.

(e) The decision of the Government in all cases are conveyed by the SIA normally within 30 days.

(f) RBI has granted general permission under Foreign Exchange Regulation Act (FERA )in respect of proposals approved by the Government. Indian companies getting foreign investment approval through FIPB route do not require any further clearance from RBI for the purpose of receiving inward remittance and issue of shares to the foreign investors. Such companies are, however, required to file the required document with the concerned Regional Offices of the RBI within 30 days after issue of shares to the foreign investors.

(g) Similarly, for inward remittance and issue of shares to NRI/OCB up to 100 per cent equity also, prior permission of RBI is not required. These companies have to file the required documents with the concerned Regional Offices of RBI within 30 days after the issue of shares to NRIs/OCBs.