FOREIGN DIRECT INVESTMENT’S IN

What is FDINon Resident entity or person Invest in Resident entity

Through Merger

Through Acquisition

Through Building new facilities

Through Reinvesting Profits earned from Overseas Operations

Through Intra Company Loans

Need of FDI

Increase Sales & Profit

Entering into fast growing markets

Reduce Costs

Consolidate trade blocks Protect foreign markets

Acquiring Technology & Managerial Skills

Need of FDI

Inflow of foreign currency Increase in import and export

Improvement in infrastructure Improvement in Technology & Skills

EmploymentCurrency Placement

Procedure for receiving FDI in India

Automatic Route Government RouteAs per the Indian govt. policy for some business entities government has kept automatic route in which entities wouldn’t be require to take any prior govt. permissions to invest in Indian company.

In India for some businesses would require the prior permission of the govt. as well as RBI and other govt. financial institute to perform in Indian Market’s. There are strict rules and regulations has been kept in policy to entertain this sector organization.

 

• Lottery Business including Government/private lottery, online lotteries, etc.  • Gambling and Betting including casinos etc.  • Chit funds  • Nidhi company  • Trading in Transferable Development Rights (TDRs)  • Real Estate Business or Construction of Farm Houses  

• Manufacturing of cigars, cheroots, cigarillos and cigarettes, of tobacco or of tobacco

substitutes  

• Activities/sectors not open to private sector investment e.g. Atomic Energy and

Railway Transport (other than Mass Rapid Transport Systems).  

Prohibited Sectors for FDI through Indian Govt.

Sector specific Condition on FDI Sr. No. Sector / Activity % of Equity Share as FDI Entry Route1 Agriculture & Animal Husbandry 100% Automatic2 Tea Plantation 100% Government

3Mining and Exploration of metal and non-metal ores including diamond, gold, silver and precious ores but excluding titanium bearing minerals and its ores

100% Automatic

4Coal and Lignite ( Mining For power, steel & cement projects in India) 100% Automatic

5 Coal Processing Plant 100% Automatic

6

Mining and mineral separation of titanium bearing minerals and ores, its value addition and integrated activities 100% Government

7 Petroleum & Natural Gas (Exploration Only)100% Government

8

Petroleum refining by the Public Sector Undertakings(PSU),without any disinvestment or dilution of domestic equity in the existing PSUs. 49% Automatic

Sector specific Condition on FDI Sr. No. Sector / Activity % of Equity Share as FDI Entry Route

9Manufacture of items reserved for production in Micro and Small Enterprises 24% Government

10 Defence 26% Government11 Defence Upto 49% Government

12

Broadcasting Carriage Services - Teleports, DTH, Cable Networks, Mobile TV, HITS 74%

Automatic 49 % above that Government upto 74%

13

Broadcasting Content Services ( FM & Uplinking News and Current affairs TV Channels 26%

Government

14Uplinking & Downlinking of Non News & Current affairs TV Channels 100% Government

15 Print Media 26% Government

16Publishing & Printing of Scientific and technical Magazines 100% Government

17Publication of facsimile edition of foreign news Paper 100% Government

Sector specific Condition on FDI Sr. No. Sector / Activity % of Equity Share as FDI Entry Route18 Airports 19 (a) Greenfield projects 100% Automatic20 (a) Existing projects 100% Automatic21 Air Transport Services

22(1)Scheduled Air Transport Service/Domestic Scheduled Passenger Airline

49% FDI (100% for NRI's)Automatic

23 (2) Non-Scheduled Air Transport Service 74% FDI (100% for NRI's) Automatic

24(3)Helicopter services/seaplane services requiring DGCA approval 100% Automatic

25 (4) Ground Handling Services 74% FDI (100% for NRI's) Automatic

26

(5)Maintenance and Repair organizations;flying training institutes; and technical training institutions. 100% Automatic

27

Courier services for carrying packages,parcels and other items which do notcome within the ambit of the Indian Post Office Act 100% Automatic

28

Construction Development: Townships, Housing, Built-up infrastructure 100%

Automatic

Sector specific Condition on FDI

Sr. No. Sector / Activity % of Equity Share as FDI Entry Route29 Industrial Parks – new and existing 100% Automatic

30Satellites- establishment and operation,subject to the sectoral guidelines of Department of Space/ISRO 74% Government

31 Private Security Agencies 49% Government

32Telecom Services (including Telecom Providers Category-I) 100%

Automatic up to 49% Government route beyond 49%

33 E-commerce activities 100% Automatic

34 Single Brand product retail trading 100%

Automatic up to 49% Government route beyond 49%

35 Multi Brand Retail Trading 51% Governemnt

36 Banking- Private Sector 74%

Automatic up to 49% Government route beyond 49%

-74%

37Banking- Public Sector subject to Banking Companies (Acquisition & Transfer of Undertakings) Acts 20% Government

38 Power Exchanges 49% Automatic

Market Size of India due to FDI 

According to Moody’s, is due to India’s current pro-growth policies. Net FDI inflows totalled US$ 14.1 billion in the first five months of 2014-15, representing a 33.5 per cent increase from the same period in 2013-14.

Latest Announcements through Government

• Ministry of Railway has announced that foreign investors can invest Rs. 90,300 Crore in rail infrastructure through FDI

• Government has also announced heavy investments on power, roads & infrastructure where foreign investors can participate through FDI

• There is been lot of investment is expected to get invested in India through foreign investors in coming future.

• Where as per the many of reports this time government will be working on the almost US $ 1 Trillion as funds for the infrastructure, power.

• Where Shri. Narendra Modi has also supported “ Digital India” as activity which could support telecommunication and Internet industry which will result in heavy FDI investments in India.

Way Ahead

Arnab RayGaurav SapreKunal Lalwani