According to Organization for Economic Co-operation and Development (OECD), an investment of 10% or above from abroad is considered as FDI. For a country where capital is not easily available, Foreign Direct Investment (FDI) has been an important source of money for companies. Under FDI, overseas money, either by a person or entity, is invested in an Indian company.
According to Organization for Economic Co-operation and Development (OECD), an investment of 10% or above from abroad is recognized as FDI. In India, international direct investment plan is governed under the Foreign Exchange Management Act, 2000 governed by the Reserve Bank or investment company of India. Aside from specified 11 industries/activities (mentioned below), where Government approval is obligatory, applications where there’s a doubt over which Ministry should the application fall under, DIPP has the responsibility of identifying who be the worried authority.
Proposals from NRIs and Export Oriented Units, applications relating to issues of collateral for import of capital goods/equipment, pre-operative/pre-incorporation expenses, etc. are dealt with by DIPP also. For effective handling of cases, monthly reviews by the concerned Ministries/Authorities and quarterly review meetings, co-chaired by Secretary, Department of Economic Secretary and Affairs, DIPP are also proposed to be undertaken to go over pendency of proposals with the federal government. Various categories of foreign investors – Foreign Portfolio Investors, Foreign Institutional Investors, Foreign CAPITAL RAISING Investor, Non-Resident Indians can take stakes in Indian business entities (company, partnership firms, proprietary concerns, LLPs) subject to conditions and sectoral caps on ownerships.
FIIs/FPIs are … Read the rest