New Delhi: Government on Tuesday approved foreign direct investment (FDI) amounting to Rs 7,800 crore ($1.75 billion), roughly equal to the average total monthly FDI inflows, as Asia’s third-largest economy looks overseas to fund key sectors.
India received $17.08 billion FDI in the first 10 months of the current financial year to end-March, about a quarter lower than the $22.91 billion it received in the year-ago period.
India approved a Rs 3,300 crore FDI by UK’s Reckitt Benckiser for setting up a new wholly owned subsidiary investing company that would acquire Paras Pharmaceuticals Limited, a government statement said.
Last year, the British consumer goods firm had agreed to buy privately held Indian ointments and personal care company Paras Pharmaceuticals for about $726 million.
The statement said the Cabinet Committee on Economic Affairs, headed by Prime Minister Manmohan Singh, also approved Hero Investment Private Limited’s proposal to receive FDI of Rs 4,500 crore from private equity firms Bain Capital and Lathe Investment.
Hero Investments had agreed this month to buy Honda Motors’ 26% stake in Hero Honda Motors for around $851 million, with the Japanese automaker exiting its joint venture in India after more than 26 years.
Bain Capital and Singapore sovereign wealth fund GIC would invest in Hero Investments to help repay debt used to buy a 26% stake in joint venture motorcycle maker Hero Honda, Hero had said this month.
Shares of Hero Honda were trading up more than 4% at Rs 1,562.15 at 1:00 p.m. (0730 GMT).
Finance minister Pranab Mukherjee this month said India was in talks to further liberalise its FDI rules, as slow progress on opening up sectors such as retail, insurance and infrastructure are seen as key to sustaining rapid growth.