Not considering foreign direct investment in multi-brand retail yet: Sitharaman

Sep 7, 2016 0

New Delhi–India is not considering allowing foreign direct investment (FDI) in multi-brand retail trading in the current circumstances, the government said on Wednesday.

“At the moment, India can create several Walmarts of its own. We welcome anybody. But if some way this dialogue is moving towards, why not in multi-brand retail in India? My answer is – Not yet,” Commerce Minister Nirmala Sitharaman said at The Economist magazine’s ‘India Summit’ here.

Elaborating on the rationale behind government policy, the minister said there is an issue of last-mile connectivity, adequate infrastructure and financial inclusion of segments like farmers and small traders.

Sitharaman“If only that happens, and if they (farmers and small traders) are adequately empowered to tackle the market themselves. But today we are trying to bridge those gaps. We are still not ready to have them and face a competition where there would not be a level playing field,” Sitharaman said.

India currently permits 51 per cent foreign investment in multi-brand retail. The Bharatiya Janata Party, the largest constituent of the ruling NDA, is opposed to FDI in this sector.

To a query on the absence of big supermarkets in India, Sitharaman said that “our supermarkets are friendlier than the faceless supermarkets I have been in the West.”

Meanwhile, an e-commerce committee headed by NITI Aayog chief executive Amitabh Kant held its first meeting here on Monday to discuss issues related to the sector, a senior official said.

Currently, the government allows 100 per cent FDI via the automatic route in the marketplace model of e-commerce.

However, foreign investment is not permitted in inventory-based e-commerce. (IANS)

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Many changes in Indian foreign investment policy

Aug 31, 2016 0

New Delhi–The Union Cabinet on Wednesday gave its sanction for the major changes in the foreign direct investment policy approved in June and designed to liberalise norms by increasing FDI to 100 per cent in defence and further ease the regime in many other sectors.

“The FDI policy amendments are meant to liberalise and simplify the FDI policy so as to provide ease of doing business in the country leading to larger FDI inflows contributing to growth of investment, incomes and employment,” said a Commerce Ministry release here.

The changes introduced in the policy included increase in sectoral caps, bringing more activities under automatic route and easing of conditionalities for foreign investment.

According to the changed norms, FDI in defence sector is now permitted up to 100 per cent, while earlier 49 per cent FDI was permitted under the automatic route. FDI above 49 per cent was permitted through approval on a case-by-case basis, wherever it was likely to result in access to state-of-the-art technology.

Hundred per cent FDI under the automatic route has been allowed in brownfield airport projects, with a view to aid in modernisation of existing airports.

For single-brand retail trading, norms of local sourcing have been relaxed for up to three years with prior government approval for entities trading in products having state-of-the-art and “cutting edge” technology.

The FDI ceiling in sectors like teleports, Direct to Home (DTH), cable networks, mobile TV and Headend-in-the Sky Broadcasting Service (HITS) has been increased to 100 per cent.

For the pharmaceutical sector, new liberalised norms allow 74 per cent FDI under the automatic route for brownfield pharmaceuticals, while FDI beyond 74 per cent would be permitted through the government approval route.

Further, 100 per cent FDI under the automatic route for trading, including through e-commerce, has been permitted for food products manufactured or produced in India.

In case of private security agencies, FDI up to 49 per cent is now permitted under the automatic route, and beyond that and up to 74 per cent by way of government approval.

The latest FDI liberalisation has resulted in increased FDI inflows at $55.46 billion in 2015-16, as against $36.04 billion in 2013-14, the statement said.

“This is the highest-ever FDI inflow for a particular financial year,” it said.

“However, it was felt that the country has potential to attract far more foreign investment which can be achieved by further liberalising and simplifying the FDI regime,” it added.

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India approves permanent residency status for foreign investors

Aug 31, 2016 0

New Delhi– In an attempt to encourage foreign investments in India, the central government on Wednesday approved a scheme to grant permanent residency status (PRS) to foreign investors for 10 years subject to conditions specified in the foreign direct investment (FDI) policy.

The Union Cabinet approved the scheme at a meeting chaired by Prime Minister Narendra Modi here.

Indian Prime Minister Mody

Indian Prime Minister Mody

According to a government statement, suitable provisions will be incorporated in the visa manual to provide for the grant of PRS to foreign investors.

The PRS will be granted for a period of 10 years with multiple entry. This can be renewed for 10 more years if the PRS holder has not come to adverse notice.

The scheme will be applicable only to foreign investors fulfilling the prescribed eligibility conditions, his/her spouse and dependents.

In order to avail this scheme, the foreign investor will have to invest a minimum of Rs 10 crore to be brought within 18 months or Rs 25 crore to be brought within 36 months.

Further, the foreign investment should result in generating employment to at least 20 resident Indians every financial year.

The PRS will serve as a multiple entry visa without any stay stipulation and PRS holders will be exempted from the registration requirements.

The PRS holders will be allowed to purchase one residential property for dwelling purpose.

The spouse/dependents of the PRS holder will be allowed to take up employment in private sector (in relaxation to salary stipulations for Employment Visa) and undertake studies in India. (IANS)

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Canadian firm to invest $12 million in India

Aug 11, 2016 0

New Delhi–Canadian Enterprise Mobility Management (EMM) solutions company SOTI on Thursday announced it will invest $12 million in a state-of-the-art facility in India which will add 300 new jobs in engineering and software development fields in the next two years.

India is a key focus market in SOTI’s growth strategy, acting as a hub for Asia-Pacific (APAC) operations across manufacturing, retail, hospitality, banking and transport and logistics sectors, the company said in a statement.

“With SOTI’s competency in enterprise mobility and focus on enabling business transformation across vertical sectors, we are uniquely positioned to execute on a connected enterprise mobility and internet of things (IoT) strategy,” said Carl Rodrigues, CEO, SOTI.

According to a recent study by IT industry apex body Nasscom and Deloitte, the global enterprise mobility market has been pegged at $140 billion by 2020, with APAC region to grow by 21 per cent.

SOTI works across solutions for both the knowledge and task worker, rugged and consumer devices, connected peripherals, and all major operating systems.

The company has six global offices and employees in more than 22 countries.

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Cabinet approves foreign investment in non-banking finance companies under automatic route

Aug 10, 2016 0

New Delhi— The Union Cabinet on Wednesday approved foreign investment under the automatic route in non-banking finance companies (NBFCs)/Other Financial Services.

The Cabinet meeting was chaired by Prime Minister Narendra Modi.

As per the government’s decision, the Foreign Exchange Management (Transfer or Issue of Security by the Person Resident Outside India) regulations on the NBFC will be amended to allow inflow of foreign investments under the automatic route.

However, such entitites shoud be governed by financial sector regulators like the Reserve Bank of India (RBI), the Securities and Exchang Board of India (SEBI), the Pension Fund Regulatory and Development Authority (PFRDA) and others.

“Foreign investment in “Other Financial Services”, which are not regulated by any regulators/government agency, can be made on approval route,” the government said.

The government has also eliminated minimum capitalisation norms stipulated under the Foreign Direct Investment (FDI) policy as the limit has been prescribed by financial sector regulators.

“This will induce FDI and spur economic activities. It will cover the whole of India and is not limited to any state/districts,” the government said.

The Cabinet decision came after Finance Minister Arun Jaitley in his 2016-17 Budget speech announced that the FDI will be allowed beyond the 18 specified NBFC activities in the automatic route in other activities which are regulated by the financial sector regulators.

The present regulations governing the NBFCs stipulates that the FDI would be allowed through the automatic route for only 18 specified NBFC activities after fulfilling prescribed minimum capitalisation norms.

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