Investment in India

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FDI in India

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India's Investment Updates

FDI in India

Foreign Direct Investment (FDI) has been recognized as one of the important drivers of the economic growth of India.

Even though there continue to be a few sectors where the existing and notified sectoral policy does not permit FDI beyond a ceiling, Foreign direct investment is freely allowed in all sectors including the services sector.

flowchart

FDI can be divided into two broad categories:

Investment under automatic route:

FDI for virtually all items and activities can be brought in through the Automatic route under powers delegated to the Reserve Bank of India (RBI).

Investment with prior approval of the government:

For the remaining items and activities through Government approval; Government approvals are accorded on the recommendation of the Foreign Investment Promotion Board (FIPB).

More details of the FDI from the Ministry of Commerce and Industry:

FDI Manual (PDF)

Type of Registration and Approval

> Liaison office

Approval: Requires approval of RBI which also monitors its activities on an ongoing basis.

> Branch office/ Project office

Approval: The opening and operation of these offices is regulated by the RBI. There is requirement of obtaining prior approval and meets specified conditions. Activities under this category generally do not include manufacturing (unless setup in an SEZ) and retail trading.

> Local subsidiary or joint venture company

Subsidiary or a Joint Venture Company can be formed either as a Private Limited Company or a Public Limited Company.