CONTINUED.................................
(c) Extent of equity from the point of view whether the proposed project would amount to a holding company/wholly owned subsidiary/a company with dominant foreign investment (i.e. 76% or more)/joint venture.
(d) Whether the proposed foreign equity is for setting up a new project (joint venture or otherwise) or whether it is for enlargement of foreign/NRI equity or whether it is for fresh induction of foreign equity/NRI equity in an existing Indian company.
(e) In the case of fresh induction of foreign/NRI equity and/or in cases of enlargement of foreign/NRI equity in existing Indian companies whether there is a resolution of the Board of Directors supporting the said induction/enlargement of foreign/NRI equity and whether there is a shareholders agreement or not.
(f) In the case of induction of fresh equity in the existing Indian companies and/or enlargement of foreign equity in existing Indian companies, the reason why the proposal has been made and the modality for induction/enhancement (i.e. whether by increase of paid up capital/authorised capital, transfer of shares (hostile or otherwise) whether by rights issue, or by what modality).
(g) Issue/transfer/pricing of shares will be as per SEBI/RBI guidelines.
(h) Whether the activity is an industrial or a service activity or a combination of both.
(i) Whether the item of activity involves any restriction by way of reservation for the small scale sector.
(j) Whether there are any sectoral restrictions on the activity (e.g. there is ban on foreign investment in real estate while it is not so for NRI/OCB investment).
(k) Whether the item involves only trading activity and if so whether it involves export or both export and import, or also includes domestic trading and if domestic trading whether it also includes retail trading.
(l) Whether the proposal involves import of items which are either hazardous, banned or detrimental to environment (e.g. import of plastic scrap or recycled plastics).
9. In respect of industries/activities listed in Annexure - III of the New Industrial Policy automatic approval for majority equity holding (50/51/74 per cent) is accorded by the Reserve Bank of India. FIPB may consider recommending higher levels of foreign equity in respect of these activities keeping in view the special requirements and merit of each case.
10. In respect of other industries/activities the Board may consider recommending 51 per cent foreign equity on examination of each individual proposal. For higher levels of equity up to 74 per cent the Board may consider such proposals keeping in view considerations such as the extent of capital needed for the project, the nature and quality of technology, the requirement of marketing and management skills and the commitment for exports.
11. FIPB may consider and recommend proposals for 100 per cent foreign owned holding/subsidiary companies based on the following criteria :
(a) where only "holding" operation is involved and all subsequent/downstream investments to be carried out would require prior approval of the Government;
(b) where proprietary technology is sought to be protected or sophisticated technology is proposed to be brought in;
(c) where at least 50% of production is to be exported;
(d) proposals for consultancy ; and
(e) proposals for power, roads, ports and industrial model towns/industrial parks or estates.
12 In special cases, where the foreign investor is unable initially to identify an Indian joint venture partner, the Board may consider and recommend proposals permitting 100 per cent foreign equity on a temporary basis on the condition that the foreign investor would divest to the Indian parties (either individual, joint venture partners or general public or both) at least 26 per cent of its equity within a period of 3-5 years.
13. Similarly in the case of a joint venture, where the Indian partner is unable to raise resources for expansion/technological upgradation of the existing industrial activity the Board may consider and recommend increase in the proportion/percentage (up to 100 per cent) of the foreign equity in the enterprise.
14. In respect of trading companies, 100 per cent foreign equity may be permitted in the case of activities involving the following :
(i) export;
(ii) bulk imports with export/expanded warehouse sales ;
(iii) cash and carry wholesale trading ;
(iv) other import of goods or services provided at least 75% is for procurement and sale of goods and services among the companies of the same group.
(d) Whether the proposed foreign equity is for setting up a new project (joint venture or otherwise) or whether it is for enlargement of foreign/NRI equity or whether it is for fresh induction of foreign equity/NRI equity in an existing Indian company.
(e) In the case of fresh induction of foreign/NRI equity and/or in cases of enlargement of foreign/NRI equity in existing Indian companies whether there is a resolution of the Board of Directors supporting the said induction/enlargement of foreign/NRI equity and whether there is a shareholders agreement or not.
(f) In the case of induction of fresh equity in the existing Indian companies and/or enlargement of foreign equity in existing Indian companies, the reason why the proposal has been made and the modality for induction/enhancement (i.e. whether by increase of paid up capital/authorised capital, transfer of shares (hostile or otherwise) whether by rights issue, or by what modality).
(g) Issue/transfer/pricing of shares will be as per SEBI/RBI guidelines.
(h) Whether the activity is an industrial or a service activity or a combination of both.
(i) Whether the item of activity involves any restriction by way of reservation for the small scale sector.
(j) Whether there are any sectoral restrictions on the activity (e.g. there is ban on foreign investment in real estate while it is not so for NRI/OCB investment).
(k) Whether the item involves only trading activity and if so whether it involves export or both export and import, or also includes domestic trading and if domestic trading whether it also includes retail trading.
(l) Whether the proposal involves import of items which are either hazardous, banned or detrimental to environment (e.g. import of plastic scrap or recycled plastics).
9. In respect of industries/activities listed in Annexure - III of the New Industrial Policy automatic approval for majority equity holding (50/51/74 per cent) is accorded by the Reserve Bank of India. FIPB may consider recommending higher levels of foreign equity in respect of these activities keeping in view the special requirements and merit of each case.
10. In respect of other industries/activities the Board may consider recommending 51 per cent foreign equity on examination of each individual proposal. For higher levels of equity up to 74 per cent the Board may consider such proposals keeping in view considerations such as the extent of capital needed for the project, the nature and quality of technology, the requirement of marketing and management skills and the commitment for exports.
11. FIPB may consider and recommend proposals for 100 per cent foreign owned holding/subsidiary companies based on the following criteria :
(a) where only "holding" operation is involved and all subsequent/downstream investments to be carried out would require prior approval of the Government;
(b) where proprietary technology is sought to be protected or sophisticated technology is proposed to be brought in;
(c) where at least 50% of production is to be exported;
(d) proposals for consultancy ; and
(e) proposals for power, roads, ports and industrial model towns/industrial parks or estates.
12 In special cases, where the foreign investor is unable initially to identify an Indian joint venture partner, the Board may consider and recommend proposals permitting 100 per cent foreign equity on a temporary basis on the condition that the foreign investor would divest to the Indian parties (either individual, joint venture partners or general public or both) at least 26 per cent of its equity within a period of 3-5 years.
13. Similarly in the case of a joint venture, where the Indian partner is unable to raise resources for expansion/technological upgradation of the existing industrial activity the Board may consider and recommend increase in the proportion/percentage (up to 100 per cent) of the foreign equity in the enterprise.
14. In respect of trading companies, 100 per cent foreign equity may be permitted in the case of activities involving the following :
(i) export;
(ii) bulk imports with export/expanded warehouse sales ;
(iii) cash and carry wholesale trading ;
(iv) other import of goods or services provided at least 75% is for procurement and sale of goods and services among the companies of the same group.
TO BE CONTINUED.............................
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Foreign direct investment in the country's real estate sector is likely to rise to $25 billion in the next 10 years from the current $4 billion, even as the industry faces a slowdown in the short term due to rising interest rates, an Assocham study said. “Despite real estate market confronting a temporary depression with real interest rates hovering between 12-16 per cent, FDI in real estate market would increase by about $21 billion to touch $25 billion in the next 10 years,'' said industry chamber Asso cham. At present, the domestic real estate market is estimated at $15 billion, of which FDI contributions are about $4 billion. “In future, higher interest rates would subside with India scaling a GDP growth of over 10 per cent for at least a decade, and crea te a huge space for overseas investors in its real estate sector,'' Assocham President Sajjan Jindal said. The sector would grow larger as the IT sector alone is expected to require about 200 million sq ft of space across the major and large townships, it added. It is also estimated that in India's residential sector, housing shortage is around 20 million u nits. About 100 million sq ft is likely to be added by end of 2008 from over 300 mall projects.For more view- realtydigest.blogspot.com
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