Foreign Direct Investment (FDI) in India with specific approval from FIPB

FDI inflows in 2006-07 are expected to be 14 billion dollars compared to 7.7 billion dollars last year. Continuous liberalization in FDI policy and simplification of procedures are contributing immensely to attracting increased inflows to India. Annual review of the FDI policy taking into account the changing requirements of investors has given a new confidence to foreign firms.

Customized assistance is now offered to clients across the globe by D BATRA & CO. seeking approval for entering Indian market.

Applications under Specific Approval route are to be submitted to the SIA, housed in the Ministry of Commerce and Industry. D BATRA & CO. offers liaisoning services with these departments to facilitate expeditious disposal of applications seeking approval. The SIA facilitation office receives all applications, peruses the documents upon submission and advises applicants of any missing information or further details to be submitted. Application details are summarized and placed at the weekly meeting of the FIPB within 15 days of acknowledgement. Prior approval of the GoI is necessary for foreign investment in the following cases:

(1) All proposals that require an Industrial License which includes (a) The item requiring an Industrial License under the Industries; (b) Development and Regulation) Act, 1951; (c) Foreign investment being more than 24% in the equity capital of units manufactured items reserved for small-scale industries; and (d) All items which require an Industrial License in terms of the locational policy notified by Government under the New Industrial Policy of 1991

(2) All proposals in which the foreign collaborator has an existing venture/ tie up in India in the same field.

(3) All proposals relating to acquisition of shares in an existing Indian company in the financial services sector, and where SEBI ( Substantial Acquisitions of Shares and Takeover ) Regulations, 1997 gets attracted;

(4) All proposals falling outside notified sectoral policy/ caps or under sectors in which FDI is not permitted and / or whenever an investor chooses to make an application to the FIPB and to avail of the automatic route.

(5) Areas/ sectors/ activities hitherto not open to foreign investment shall continue to be so unless otherwise decided and notified by the Government.

(6) Besides sector guidelines, applications that involve equity participation in other than cash form, import of used capital goods, equity swaps between India and foreign entities, etc., all fall under the purview of the specific approval route.

The FIPB, comprising the Secretaries of Industries, Commerce, Finance and External Affairs, besides officials from various administrative Ministries, meets every week and considers applications in their totality and free from other parameters. Usually, 50 or more proposals are disposed of each meeting, while some are deferred pending comments of participants or other agencies. D Batra & Co. keeps constant and close vigil on the entire process and consequently assures grant of approval to the foreign entrants.