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Business News/ Politics / Policy/  New format for FDI proposals submitted to FIPB
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New format for FDI proposals submitted to FIPB

Foreign investors will now have to separately provide their Indian joint venture partners' details

The new Bharatiya Janata Party-led National Democratic Alliance government has been taking steps to boost FDI, such as raising the cap in the defence sector to 49%. Photo: MintPremium
The new Bharatiya Janata Party-led National Democratic Alliance government has been taking steps to boost FDI, such as raising the cap in the defence sector to 49%. Photo: Mint

New Delhi: Seeking to expedite clearances for foreign investment proposals, the commerce and industry ministry has prescribed a format for submitting applications before the Foreign Investment Promotion Board (FIPB).

A foreign investor will be required to provide separate details about its joint venture partner. Foreign single and multi-brand retailers will have to present documents to show that the brand which they propose to sell in India is an international brand.

A global retailer would also have to give diagrammatic representation of the flow of funds into the joint venture indicating the business structure.

Other information which the foreign retail player will have to provide includes the status compliance of conditions under the foreign direct investment (FDI) policy; a list of countries where the brand is being sold internationally; existing activities and the existing capital structure of the Indian joint venture partner company.

“In order to help us serve you better and expeditiously, all applicants filing fresh proposals for consideration by FIPB are requested to ensure that (all the relevant) information/documents are available in their application form," a department of industrial policy and promotions (DIPP) notice said.

Although the previous United Progressive Alliance (UPA) government had permitted 51% FDI in multi-brand retail, the new Bharatiya Janata Party-led National Democratic Alliance government has been opposing the policy.

Till now, only UK-based Tesco Plc’s proposal has been approved by the government. On the other hand, the government permits 100% FDI in single brand retail.

The government had allowed Swedish furniture major Ikea AB to invest 10,500 crore in FDI in India for setting up single brand retail stores to sell mostly home furnishing items.

Several other players’ proposals, including Pavers England Ltd and sportswear giant Decathlon UK Ltd, have also been approved. FDI in India grew by only 8% to $24.29 billion in 2013-14.

The government is taking several steps to boost FDI in the country. It has recently de-licensed several defence products for private players, besides raising the FDI cap to 49% in the sector. The government has also proposed to increase the FDI limit in insurance sector to 49%.

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Published: 13 Jul 2014, 09:02 PM IST
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