Economics Assignment: "Foreign Direct Investment (Fdi) in India"

[FOREIGN DIRECT INVESTMENT (FDI) IN INDIA ]
ECONOMICS ASSIGNMENT
FOREIGN DIRECT INVESTMENT (FDI)
IN INDIA
BY:
GROUP 6
NAVNEET CHAUDHARY
NIKESH BISWAL
SAGAR SINGH
MUTHU AYYANAR
JAIRAJ VAIDYA
Page 1

CONTENT:
PARTICULAR
PAGE NO.
A. INTRODUCTION
B. FOREIGN DIRECT INVESTMENT (FDI) FLOWS TO INDIA
C. WHO CAN INVEST IN INDIA
D. ENTITIES FOR FDI
E. ENTRY ROUTES FOR FDI
F. GUIDELINES FOR CONSIDERATION OF FDI PROPOSALS BY FIPB
G. TREND IN FDI FLOWS
11
H. TRENDS IN FDI FLOWS TO INDIA
13
I.
1. Cumulative FDI flows into India (2000-2015)
14
2. Financial Year-Wise FDI inflow Data
20
STATEMENT ON COUNTRY-WISE FDI EQUITY INFLOWS
22
J. STATEMENT ON SECTOR-WISE FDI EQUITY INFLOWS
25
K. INDIAN ECONOMY
1. Recent Trends in Indian Economy
2. Growth in Gross Domestic Product
3. Economic Survey 2014-13
27
28
29
L. POTENTIAL FOR INVESTMENT IN INDIA
30
M. ADVANTAGE IN INDIA
32
1. Indian Economy
33
2. Agriculture Sector
33
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3. Industry Sector
33
4. Services Sector
33
N. FDI POLICY FRAMEWORK

1. FDI Policy Framework in India
34
2. FDI Policy: The International Experience
37
3. Cross-Country Comparison of FDI Policies Where does India stand?
41
O. FDI FLOWS TO INDIA IN RECENT PERIOD
44
P. APPROVAL FOR FDI IN LIMITED LIABILITY PARTNERSHIP FIRM
54
Q. SECTOR FOR FDI

1. FDI in Agriculture
55
2. FDI in Mining
57
3. FDI in Manufacturing
59
4. FDI in Power
59
5. FDI in Defence
60
6. FDI in Civil Aviation Sector
62
7. FDI in Banking- Public Sector
63
8. FDI in Credit Information Companies (CIC)
64
9. FDI in Broadcasting
65
10. FDI in Commodity Exchanges
66
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11. FDI in Real Estate & Development of Townships
67
12. FDI in Industrial Park
70
13. FDI in Insurance
71
14. FDI in Infrastructure Company in the Securities Market
71
15. FDI in Non-Banking Finance Companies (NBFC)
72
16. FDI in Petroleum & Natural Gas Sector
74
17. FDI in Print Media
75
18. FDI in Telecommunication
76
19. FDI in Trading
79
20. FDI in Courier services
81
21. FDI in Retail sector
82
R. ECONOMIC INDICATORS
83
S. TOP 10 FDI EQUITY INFLOW CASES
85
T. CONCLUSION
95
U. LIST OF INVESTMENT PROMOTION AGENCIES IN INDIA STATE-WISE
97
V. REFERENCES
106
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Page 5
INTRODUCTION
Page 6
A. INTRODUCTION
India has been ranked at the second place in global foreign direct investments in 2010 and will continue to
remain among the top five attractive destinations for international investors during 2010-12 period, according
to United Nations Conference on Trade and Development (UNCTAD) in a report on world investment
prospects titled, 'World Investment Prospects Survey 2009-2014'.
The 2010 survey of the Japan Bank for International Cooperation released in December 2010, conducted
among Japanese investors, continues to rank India as the second most promising country for overseas business
operations.
A report released in February 2010 by Leeds University Business School, commissioned by UK Trade &
Investment (UKTI), ranks India among the top three countries where British companies can do better business
during 2014-14.
According to Ernst and Young's 2010 European Attractiveness Survey, India is ranked as the 4th most
attractive foreign direct investment (FDI) destination in 2010. However, it is ranked the 2nd most attractive
destination following China in the next three years.
Moreover, according to the Asian Investment Intentions survey released by the Asia Pacific Foundation in
Canada, more and more Canadian firms are now focusing on India as an investment destination. From 8 per
cent in 2005, the percentage of Canadian companies showing interest in India has gone up to 13.4 per cent in
2010.
India attracted FDI equity inflows of US$ 2,014 million in December 2010. The cumulative amount of FDI
equity inflows from April 2000 to December 2010 stood at US$ 186.79 billion, according to the data released
by the Department of Industrial Policy and Promotion (DIPP).
The services sector comprising financial and non-financial services attracted 21 per cent of the total FDI equity
inflow into India, with FDI worth US$ 2,853 million during April-December 2010, while telecommunications
including radio paging, cellular mobile and basic telephone services attracted second largest amount of FDI
worth US$ 1,327 million during the same period. Automobile industry was the third highest sector attracting
FDI worth US$ 1,066 million followed by power sector which garnered US$ 1,028 million during the financial
year April-December 2010. The Housing and Real Estate sector received FDI worth US$ 1,024 million.
During April-December 2010, Mauritius has led investors into India with US$ 5,746 million worth of FDI
comprising 42 per cent of the total FDI equity inflows into the country. The FDI equity inflows in Mauritius is
followed by Singapore at US$ 1,449 million and the US with US$ 1,055 million, according to data released by
DIPP.
Page 7
Research Methodology
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B. FOREIGN DIRECT INVESTMENT (FDI) FLOWS TO INDIA

FDI inflows to India remained sluggish, when global FDI flows to EMEs had recovered in 2014-15, despite
sound domestic economic performance ahead of global recovery. The paper gathers evidence through a panel
exercise that actual FDI to India during the year 2014-15 fell short of its potential level (reflecting underlying
macroeconomic parameters) partly on account of amplification of policy uncertainty as measured through
Kauffmanns Index.
FDI inflows to India witnessed significant moderation in 2014-15 while other EMEs in Asia and Latin America
received large inflows. This had raised concerns in the wake of widening current account deficit in India
beyond the perceived sustainable level of 3.0 per cent of GDP during April-December 2010. This also assumes
significance as FDI is generally known to be the most stable component of capital flows needed to finance the
current account deficit. Moreover, it adds to investible resources, provides access to advanced technologies,
assists in gaining production know-how and promotes exports.
A perusal of Indias FDI policy vis--vis other major emerging market economies (EMEs) reveals that though
Indias approach towards foreign investment has been relatively conservative to begin with, it progressively
started catching up with the more liberalized policy stance of other EMEs from the early 1990s onwards, inter
alia in terms of wider access to different sectors of the economy, ease of starting business, repatriation of
dividend and profits and relaxations regarding norms for owning equity. This progressive liberalization,
coupled with considerable improvement in terms of macroeconomic fundamentals, reflected in growing size of
FDI flows to the country that increased nearly 5 fold during first decade of the present millennium.
Though the liberal policy stance and strong economic fundamentals appear to have driven the steep rise in FDI
flows in India over past one decade and sustained their momentum even during the period of global economic
crisis (2008-09 and 2009-10),the subsequent moderation in investment flows despite faster recovery from the
crisis period appears somewhat inexplicable. Survey of empirical literature and analysis presented in the paper
seems to suggest that these divergent trends in FDI flows could be the result of certain institutional factors that
dampened the investors sentiments despite continued strength of economic fundamentals. Findings of the
panel exercise, examining FDI trends in 10 select EMEs over the last 7 year period, suggest that apart from
macro fundamentals, institutional factors such as time taken to meet various procedural requirements make
significant impact on FDI inflows.
This paper has been organized as follows: Section 1 presents trends in global investment flows with particular
focus on EMEs and India. Section 2 traces the evolution of Indias FDI policy framework, followed by crosscountry experience reflecting on Indias FDI policy vis--vis that of select EMEs. Section 3 deals with
plausible explanations of relative slowdown in FDI flows to India in 2014-15 and arrives at an econometric
evidence using panel estimation. The last section presents the conclusions.
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C. WHO CAN INVEST IN INDIA

1. A non-resident entity (other than a citizen of Pakistan or an entity incorporated in Pakistan) can invest in India,
subject to the FDI Policy. A citizen of Bangladesh or an entity incorporated in Bangladesh can invest in India
under the FDI Policy, only under the Government route.
2. NRIs resident in Nepal and Bhutan as well as citizens of Nepal and Bhutan are permitted to invest in the
capital of Indian companies on repatriation basis, subject to the condition that the amount of consideration for
such investment shall be paid only by way of inward remittance in free foreign exchange through normal
banking channels.
3. OCBs have been derecognized as a class of Investors in India with effect from September 16, 2003. Erstwhile
OCBs which are incorporated outside India and are not under the adverse notice of RBI can make fresh
investments under FDI Policy as incorporated non-resident entities, with the prior approval of Government of
India if the investment is through Government route; and with the prior approval of RBI if the investment is
through Automatic route.
4. (i) An FII may invest in the capital of an Indian Company under the Portfolio Investment Scheme which
limits the individual holding of an FII to 10% of the capital of the company and the aggregate limit for FII
investment to 24% of the capital of the company. This aggregate limit of 24% can be increased to the
sectorial cap/statutory ceiling, as applicable, by the Indian Company concerned by passing a resolution by
its Board of Directors followed by passing of a special resolution to that effect by its General Body. The
aggregate FII investment, in the FDI and Portfolio Investment Scheme, should be within the above caps.
(ii) The Indian company which has issued shares to FIIs under the FDI Policy for which the payment has
been received directly into companys account should report these figures separately under item no. 5 of
Form FC-GPR (Annex-1-A) (Post-issue pattern of shareholding) so that the details could be suitably
reconciled
for statistical/monitoring purposes.
(iii) A daily statement in respect of all transactions (except derivative trade) have to be submitted by the
custodian bank in floppy / soft copy in the prescribed format directly toRBI to monitor the overall
ceiling/sectorial cap/statutory ceiling.
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5. No person other than registered FII/NRI as per Schedules II and III of Foreign Exchange Management
(Transfer or Issue of Security by a Person Resident Outside India) Regulations of FEMA 1999, can invest/trade
in capital of Indian Companies in the Indian Stock Exchanges directly i.e. through brokers like a Person
Resident in India.
6. A SEBI registered Foreign Venture Capital Investor (FVCI) may contribute up to 100% of the capital of an
Indian Venture Capital Undertaking (IVCU) and may also set up a domestic asset management company to
manage the fund. All such investments can be made under the automatic route in terms of Schedule 6 to
Notification No. FEMA 20. A SEBI registered FVCI can also invest in a domestic venture capital fund
registered under the SEBI (Venture Capital Fund) Regulations, 1996. Such investments would also be subject
to the extant FEMA regulations and extant FDI policy including sectorial caps, etc. SEBI registered FVCIs are
also allowed to invest under the FDI Scheme, as non-resident entities, in other companies, subject to FDI
Policy and FEMA regulations.
D. ENTITIES FOR FDI

1. FDI in an Indian Company
(i) Indian companies including those which are micro and small enterprises (MSEs) can
issue capital against FDI.
2. FDI in Partnership Firm / Proprietary Concern:

(i)
A Non-Resident Indian (NRI) or a Person of Indian Origin (PIO) resident outside India can invest
by way of contribution to the capital of a firm or a proprietary concern in India on nonrepatriation basis provided:
(a)
Amount is invested by inward remittance or out of NRE/FCNR(B)/NRO account
maintained with Authorized Dealers / Authorized banks.
(b)
The firm or proprietary concern is not engaged in any agricultural/plantation or real estate
business or print media sector.
(c)
Amount invested shall not be eligible for repatriation outside India.
(ii)
Investments with repatriation benefits: NRIs/PIO may seek prior permission of Reserve Bank for
investment in sole proprietorship concerns/partnership firms with repatriation benefits. The
application will be decided in consultation with the Government of India.
(iii) Investment by non-residents other than NRIs/PIO: A person resident outside India other than
NRIs/PIO may make an application and seek prior approval of Reserve Bank for making
investment by way of contribution concern or any association of persons in India. The application
will be decided in consultation with the Government of India.
(iv) Restrictions: An NRI or PIO is not allowed to invest in a firm or proprietorship concern engaged
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in any and immovable property with a view to earning profit or earning income there from) or
engaged in Print Media.
3. FDI in Venture Capital Fund (VCF): FVCIs are allowed to invest in Indian Venture Capital Undertakings
(IVCUs) /Venture Capital Funds (VCFs) /other companies, as stated in paragraph 3.1.6 of this Circular. If
a domestic VCF is set up as a trust, a person resident outside India (non-resident entity/individual
including an NRI) cannot invest in such domestic VCF under the automatic route of the FDI scheme and
would be allowed subject to approval of the FIPB. However, if a domestic VCF is set-up as an
incorporated company under the Companies Act, 1956, then a person resident outside India (non-resident
entity/individual including an NRI) can invest in such domestic VCF under the automatic route of FDI
Scheme, subject to the pricing guidelines, reporting requirements, mode of payment, minimum
capitalization norms, etc.
4. FDI in Trusts:
FDI in Trusts other than VCF is not permitted.
5. FDI in other Entities:

FDI in resident entities other than those mentioned above is not permitted.
E. ENTRY ROUTES FOR FDI

1. Investments can be made by non-residents in the equity shares/fully, compulsorily and Mandatorily
convertible debentures/ fully, compulsorily and mandatorily convertible preference shares of an Indian
company, through two routes:
(i)
The Automatic Route: under the Automatic Route, the non-resident investor or the Indian
company does not require any approval from the RBI or Government of India for the investment.
(ii)
The Government Route: under the Government Route, prior approval of the Government of India
through Foreign Investment Promotion Board (FIPB) is required. Proposals for foreign
investment under Government route as laid down in the FDI policy from time to time, are
considered by the Foreign Investment Promotion Board (FIPB) in Department of Economic
Affairs (DEA), Ministry of Finance.
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F. GUIDELINES FOR CONSIDERATION OF FDI PROPOSALS BY FIPB:

The following guidelines are laid down to enable the FIPB to consider the proposals for FDI and formulate its
recommendations.
1. All applications should be put up before the FIPB by its Secretariat within 15 days and it should be
ensured that comments of the administrative ministries are placed before the Board either prior to/or in the
meeting of the Board.
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2. Proposals should be considered by the Board keeping in view the time frame of thirty (30) days for
communicating Government decision.
3. In cases in which either the proposal is not cleared or further information is required in order to obviate
delays presentation by applicant in the meeting of the FIPB should be resorted to.
4. While considering cases and making recommendations, FIPB should keep in mind the sectorial
requirements and the sectorial policies vis--vis the proposal (s).
5. FIPB would consider each proposal in its totality.
6. The Board should examine the following while considering proposals submitted to it for
consideration:
(i)
Whether the items of activity involve industrial licence or not and if so the considerations for
grant of industrial licence must be gone into.
(ii)
Whether the proposal involves any export projection and if so the items of export and the
projected destinations.
(iii)
Whether the proposal has any strategic or defence related considerations.
7. While considering proposals the following may be prioritized:

(i)
Items falling in infrastructure sector.
(ii)
Items which have an export potential.
(iii)
Items which have large scale employment potential and especially for rural people.
(iv)
Items which have a direct or backward linkage with agro business/farm sector.
(v)
Items which have greater social relevance such as hospitals, human resource development, life
saving drugs and equipment.
(vi)
Proposals which result in induction of technology or infusion of capital.
8. The following should be especially considered during the scrutiny and consideration of
proposals:
(i)
The extent of foreign equity proposed to be held (keeping in view sectoral caps if any.
(ii)
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.
(iii)
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.
(iv)
In the case of fresh induction offerings/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
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supporting the said induction/enlargement of foreign/NRI equity and whether there is a
shareholders agreement or not.
(v)
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/authorized
capital, transfer of shares(hostile or otherwise) whether by rights issue, or by what modality.
(vi)
Issue/transfer/pricing of shares will be as per SEBI/RBI guidelines.
(vii)
Whether the activity is an industrial or a service activity or a combination of both.
(viii)
Whether the items of activity involves any restriction by way of reservation for the Micro &
Small Enterprises sector.
(ix)
Whether there are any sectorial restrictions on the activity.
(x)
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. No condition specific to the letter of approval issued to a non-resident investor would be changed or
additional condition imposed subsequent to the issue of a letter of approval. This would not prohibit
changes in general policies and, regulations applicable to the industrial sector.
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G. TREND IN FDI FLOWS

Widening growth differential across economies and gradual opening up of capital accounts in the emerging
world resulted in a steep rise in cross border investment flows during the past two decades. This section briefly
presents the recent trends in global capital flows particularly to emerging economies including India.
1. Global Trends in FDI Inflows
During the period subsequent to dotcom burst, there has been an unprecedented rise in the cross-border flows
and this exuberance was sustained until the occurrence of global financial crisis in the year 2008-09. Between
2003 and 2007, global FDI flows grew nearly four -fold and flows to EMEs during this period, grew by about
three-fold. After reaching a peak of US$ 2.1 trillion in 2007, global FDI flows witnessed significant
moderation over the next two years to touch US$ 1.1 trillion in 2009, following the global financial crisis. On
the other hand, FDI flows to developing countries increased from US$ 565 billion in 2007 to US$ 630 billion
in 2008 before moderating to US$ 478 billion in 2009.
The decline in global FDI during 2009 was mainly attributed to subdued cross border merger and acquisition
(M&A) activities and weaker return prospects for foreign affiliates,which adversely impacted equity
investments as well as reinvested earnings. According to UNCTAD, decline in M&A activities occurred as the
turmoil in stock markets obscured the price signals upon which M&As rely. There was a decline in the number
of green field investment cases as well, particularly those related to business and financial services.
From an institutional perspective, FDI by private equity funds declined as their fund raising dropped on the
back of investors risk aversion and the collapse of the leveraged buyout market in tune with the deterioration
in credit market conditions. On the other hand, FDI from sovereign wealth funds (SWFs) rose by 15 per cent in
2009. This was apparently due to the revised investment strategy of SWFs - who have been moving away from
banking and financial sector towards primary and manufacturing sector, which are less vulnerable to financial
market developments as well as focusing more on Asia.
As the world economic recovery continued to be uncertain and fragile, global FDI flows remained stagnant at
US $ 1.1 trillion in 2010. According to UNCTADs Global Investment Trends Monitor (released on January
17, 2011), although global FDI flows at aggregate level remained stagnant, they showed an uneven pattern
across regions while it contracted further in advanced economies by about 7 per cent, FDI flows recovered
by almost 10 per cent in case of developing economies as a group driven by strong rebound in FDI flows in
many countries of Latin America and Asia. Rebound in FDI flows to developing countries has been on the
back of improved corporate profitability and some improvement in M&A activities with improved valuations
of assets in the stock markets and increased financial capability of potential buyers.
Improved macroeconomic conditions, particularly in the emerging economies, which boosted corporate profits
coupled with better stock market valuations and rising business confidence augured well for global FDI
prospects. According to UNCTAD, these favourable developments may help translate MNCs record level of
cash holdings (estimated to be in the range of US$ 4-5 trillion among developed countries firms alone) into
new investments during 2011. The share of developing countries, which now constitutes over 50 per cent in
Page 16

total FDI inflows, may increase further on the back of strong growth prospects. However, currency volatility,
sovereign debt problems and potential protectionist policies may pose some risks to this positive outlook.
Nonetheless, according to the Institute of International Finance (January 2011), net FDI flows to EMEs was
projected to increase by over 11 per cent in 2011. FDI flows into select countries are given in Table 1.
Table 1 : Countries with Higher Estimated Level of FDI Inflows than India in 2015
Amount (US$ billion)
Variation (Percent)
2014
2015
2014
2100.
0
1444.
1
266.0
1770.
9
1018.
3
324.6
1114.2
2015
(Estimates
)
1122.0
565.9
526.6
129.9
186.1
96.2
62.3
59.6
57.4
Belgium
118.4
110.0
33.8
50.5
United Kingdom
186.4
91.5
45.7
46.2
76.5
24.4
35.6
34.4
Developing
Economies
China
564.9
630.0
478.3
524.8
50.9
68.1
11.5
83.5
108.3
95.0
101.0
29.7
Hong Kong
54.3
59.6
48.4
62.6
9.8
Russian
Federation
Singapore
55.1
75.5
38.7
39.7
37.0
35.8
10.9
16.8
37.4
Saudi Arabia
22.8
38.2
35.5
Brazil
34.6
45.1
25.9
World
Developed
Economies
United States
France
Germany
2015
2014
15.7
29.5
22.0
37.1
44.4
60.0
-4.3
35.2
-7.1
2015
(Estimates
)
0.7
-6.9
43.3
-3.7
69.3
50.1
45.9
49.4
9.7
69.6
24.1
12.3
18.8
48.7
54.1
122.6
67.5
-7.1
30.2
30.3
1.1
-3.4
6.3
29.3
2.6
16.6
42.6
India
25.0
40.4
34.6
23.7 61.6
-31.5
14.4
Source: World Investment Report, 2010 and Global Investment Trends Monitor, UNCTAD.
Page 17
H. TRENDS IN FDI FLOWS TO INDIA

With the tripling of the FDI flows to EMEs during the pre-crisis period of the 2000s, India also received large
FDI inflows in line with its robust domestic economic performance. The attractiveness of India as a preferred
investment destination could be ascertained from the large increase in FDI inflows to India, which rose from
around US$ 6 billion in 2001-02 to almost US$ 38 billion in 2008-09. The significant increase in FDI inflows
to India reflected the impact of liberalisation of the economy since the early 1990s as well as gradual opening
up of the capital account. As part of the capital account liberalisation, FDI was gradually allowed in almost all
sectors, except a few on grounds of strategic importance, subject to compliance of sector specific rules and
regulations. The large and stable FDI flows also increasingly financed the current account deficit over the
period. During the recent global crisis, when there was a significant deceleration in global FDI flows during
2009-10, the decline in FDI flows to India was relatively moderate reflecting robust equity flows on the back
of strong rebound in domestic growth ahead of global recovery and steady reinvested earnings (with a share of
almost 25 per cent) reflecting better profitability of foreign companies in India. However, when there had been
some recovery in global FDI flows, especially driven by flows to Asian EMEs, during 2014-15, gross FDI
equity inflows to India witnessed significant moderation. Gross equity FDI flows to India moderated to US$
20.3 billion during 2014-15 from US$ 27.1 billion in the preceding year.
Table 2: Equity FDI Inflows to India
(Percent)
Sectors
2014-15
2011-12
2014-13
2015-14
2014-15
Sectoral shares (Percent)

Manufactures
17.6
19.2
21.0
22.9
32.1
Services
56.9
41.2
45.1
32.8
30.1
Construction, Real estate and mining
15.5
22.4
18.6
26.6
17.6
9.9
17.2
15.2
17.7
20.1
100.0
100.0
100.0
100.0
100.0
Others
Total
Equity Inflows (US$ billion)

Manufactures
1.6
3.7
4.8
5.1
4.8
Services
5.3
8.0
10.2
7.4
4.5
Construction, Real estate and mining
1.4
4.3
4.2
6.0
2.6
Others
0.9
3.3
3.4
4.0
3.0
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Total Equity FDI
9.3
19.4
22.7
22.5
14.9
From a sectoral perspective, FDI in India mainly flowed into services sector (with an average share of 41 per
cent in the past five years) followed by manufacturing (around 23 per cent) and mainly routed through
Mauritius (with an average share of 43 per cent in the past five years) followed by Singapore (around 11 per
cent). However, the share of services declined over the years from almost 57 per cent in 2006-07 to about 30
per cent in 2014-15, while the shares of manufacturing, and others largely comprising electricity and other
power generation increased over the same period (Table 2). Sectoral information on the recent trends in FDI
flows to India show that the moderation in gross equity FDI flows during 2014-15 has been mainly driven by
sectors such as construction, real estate and mining and services such as business and financial services.
Manufacturing, which has been the largest recipient of FDI in India, has also witnessed some moderation
(Table 2).
I.
CUMULATIVE FDI FLOWS INTO INDIA (2000-2015):
A.
TOTAL FDI INFLOWS (from April, 2000 to March, 2015):
1. CUMULATIVE AMOUNT OF FDI INFLOWS

(Equity inflows + Re-invested earnings +Other capital) *
2. CUMULATIVE AMOUNT OF FDI EQUITY INFLOWS

(excluding, amount remitted through RBIs-NRI Schemes)
B.
1.
2.
FDI EQUITY INFLOWS
US$ 193,282 million
US$ 36,860 million
Rs. 121,907 crore US$ 22,423 million
FDI EQUITY INFLOWS (MONTH-WISE) DURING THE FINANCIAL YEAR 2014-15

Financial Year 2014-15
( April-March )
1.
2.
3.
4.
5.
Rs. 896,38 crore
FDI INFLOWS DURING FINANCIAL YEAR 2014-13 (from April, 2014 to March, 2015):
TOTAL FDI INFLOWS INTO INDIA

(Equity inflows + Re-invested earnings + Other capital)
(as per RBIs Monthly bulletin dated: 13.05.2015).
C.
US$ 290,078 million

-
Amount of FDI Equity inflows

(In Rs. Crore)
(In US$ mn)
April, 2014
May, 2014
June, 2014
July, 2014
August, 2014
9,620
7,229
6,971
8,182
12,578
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1,857
1,327
1,244
1,475
2,264

6.
7.
8.
9.
10
.
11
.
12
.
September, 2014
October, 2014
November, 2014
December, 2014
January, 2015
February, 2015
March, 2015
2014-13 (up to March, 2015) #
2011-12 (up to March, 2014) #
%age growth over last year
D.
1.
2.
3.
4,679
1,942
1,058
1,100
2,157
1,795
1,525
22,423
35,121
( - ) 38 %
FDI EQUITY INFLOWS (MONTH-WISE) DURING THE CALENDAR YEAR 2015:
Calendar Year 2015

(Jan.-Dec.)
January, 2015
February, 2015
March, 2015
Year 2015 (up to March, 2015) #
Year 2014 (up to March, 2014) #
%age growth over last year
Note:
25,552
10,295
5,798
6,012
11,719
9,654
8,297
121,907
165,146
( - ) 28 %
Amount of FDI Equity inflows

(In Rs. Crore)
(In US$ mn)
11,719
2,157
9,654
1,795
8,297
1,525
29,670
5,477
29,354
5,844
( + ) 01 %
( - ) 06 %
Country & Sector specific analysis is available from the year 2000 onwards, as Company-wise details are
provided by RBI from April, 2000 onwards only.
* Data on Re-invested earnings & Other capital, are the estimates on an average basis, based upon data
for the previous two years, published by RBI in monthly bulletin dated: 10.12.2014.
# Figures are provisional, subject to reconciliation with RBI, Mumbai.
^ Inflows for the month of March, 2014 are as reported by RBI, consequent to the adjustment made in the
figures of March, 11, August, 11 and October, 11.
Page 20
E.
SHARE OF TOP INVESTING
COUNTRIES FDI EQUITY INFLOWS (Financial
years):
Amount Rupees in crores
(US$ in million)
Ranks
Country
2012-13
(April March)
2013-14
( April March)
2014-15
(April
March)
1.
MAURITIUS
31,855
(6,987)
46,710
(9,942)
51,654
(9,497)
341,125
(73,666)
38 %
2.
SINGAPORE
7,730
(1,705)
24,712
(5,257)
12,594
(2,308)
90,182
(19,460)
10 %
3.
U.K.
12,235
(2,711)
36,428
(7,874)
5,797
(1,080)
80,459
(17,549)
9%
4.
JAPAN
7,063
(1,562)
14,089
(2,972)
12,243
(2,237)
70,094
(14,550)
8%
5.
U.S.A.
5,353
(1,170)
5,347
(1,115)
3,033
(557)
50,923
(11,121)
6%
6.
NETHERLANDS
5,501
(1,213)
6,698
(1,409)
10,054
(1,856)
42,378
(8,965)
5%
7.
CYPRUS
4,171
(913)
7,722
(1,587)
2,658
(490)
32,328
(6,889)
4%
8.
GERMANY
908
(200)
7,452
(1,622)
4,684
(860)
25,512
(5,480)
3%
FRANCE
3,349
(734)
3,110
(663)
3,487
(646)
16,865
(3,573)
2%
10.
U.A.E.
1,569
(341)
1,728
(353)
987
(180)
11,307
(2,422)
1%
97,320
(21,383)
165,146
(35,121)
121,907
(22,423)
896,913
(193,403)
TOTAL FDI INFLOWS

FROM
ALL COUNTRIES *
Cumulative
%age to total
Inflows (April
Inflows (in
00 March15) terms of US $)
*Includes inflows under NRI Schemes of RBI.

Note:
(i)
(ii)
Cumulative country-wise FDI equity inflows (from April, 2000 to March, 2015) are at
Annex-A
%age worked out in US$ terms & FDI inflows received through FIPB/SIA+ RBIs Automatic
Route + acquisition of existing shares only.
Page 21
F.
SECTORS ATTRACTING HIGHEST FDI EQUITY INFLOWS:
Page 22
Amount in Rs. crores

(US$ in million)
Ranks
Sector
2012-13
(April March)
2013-14
( April March)
2014-15
(April
March)
1.
SERVICES SECTOR **
2.
CONSTRUCTION
DEVELOPMENT:
TOWNSHIPS, HOUSING,
BUILT-UP INFRASTRUCTURE
15,054
(3,296)
7,590
(1,663)
24,656
(5,216)
15,236
(3,141)
26,306
(4,833)
7,248
(1,332)
3.
TELECOMMUNICATIONS
(radio paging, cellular mobile,
basic telephone services)
7,542
(1,665)
9,012
(1,997)
1,654
(304)
58,732
(12,856)
4.
COMPUTER SOFTWARE &

HARDWARE
DRUGS &
PHARMACEUTICALS
CHEMICALS (OTHER THAN
FERTILIZERS)
3,551
(780)
961
(209)
10,612
(2,354)
3,804
(796)
14,605
(3,232)
18,422
(4,041)
2,656
(486)
6,011
(1,123)
1,596
(292)
52,774
(11,691)
48,880
(10,318)
40,496
(8,881)
7.
AUTOMOBILE INDUSTRY
8.
POWER
5,864
(1,299)
5,796
(1,272)
5,023
(1,098)
1,405
(308)
4,347
(923)
7,678
(1,652)
8,348
(1,786)
4,754
(993)
8,384
(1,537)
2,923
(536)
7,878
(1,466)
17,777
(3,259)
39,170
(8,295)
36,137
(7,834)
34,814
(7,507)
33,260
(6,631)
5.
6.
9.
METALLURGICAL
INDUSTRIES
HOTEL & TOURISM
10
Note:
(i)
(ii)
(iii)
Cumulative
% age to
Inflows (April
total
00 March15) Inflows (In
terms of
US$)
172,275
(37,235)
19 %
101,049
(22,080)
11 %
7%
6%
5%
5%
4%
4%
4%
3%
** Services sector includes Financial, Banking, Insurance, Non-Financial / Business, Outsourcing,

R&D, Courier, Tech.Testing and Analysis
Cumulative Sector- wise FDI equity inflows (from April, 2000 to March, 2015) are at - Annex-B .
FDI Sectoral data has been revalidated / reconciled in line with the RBI, which reflects minor
changes in the FDI figures (increase/decrease) as compared to the earlier published sectoral data.
Page 23
G.
STATEMENT ON RBIS REGIONAL

OFFICES (WITH STATE COVERED)
RECEIVED FDI EQUITY INFLOWS
(from April, 2000 to March, 2015):
Amount Rupees in crores
(US$ in million)
S. RBIs - Regional
No.
Office
MUMBAI
NEW DELHI
State covered
2012-13
(April March)
2013-14
( April March)
2014-15
(April
March)
Cumulative
%age to
Inflows (April 00 total Inflows
March15)
(in terms of
US$)
MAHARASHTRA, 27,669
DADRA &
(6,097)
NAGAR HAVELI,
DAMAN & DIU
44,664
(9,553)
47,359
(8,716)
293,494
(63,337)
33
12,184
(2,677)
37,403
(7,983)
17,490
(3,222)
168,581
(36,294)
19
6,115
(1,352)
6,133
(1,332)
6,711
(1,422)
7,235
(1,533)
15,252
(2,807)
5,553
(1,023)
52,810
(11,081)
49,445
(10,784)
DELHI, PART OF
UP AND
HARYANA
CHENNAI
TAMIL NADU,
PONDICHERRY
BANGALORE
KARNATAKA
AHMEDABAD
GUJARAT
HYDERABAD
KOLKATA
ANDHRA
PRADESH
WEST BENGAL,
SIKKIM,
ANDAMAN &
NICOBAR
ISLANDS
4,730
(1,001)
4,039
(848)
1,817
(394)
2,676
(493)
6,290
(1,159)
2,319
(424)
39,100
(8,650)
36,891
(7,968)
10,504
(2,306)
3,294
(724)
5,753
(1,262)
426
(95)
1,892
(416)
624
(130)
255
(47)
5,564
(1,201)
2,093
(451)
569
(123)
1,208
(220)
4,787
(997)
0.5
CHANDIGARH CHANDIGARH,
PUNJAB,
HARYANA,
HIMACHAL
PRADESH
BHOPAL
MADHYA
PRADESH,
CHATTISGARH
4
1
10.
KOCHI
KERALA,
LAKSHADWEEP
167
(37)
2,274
(471)
390
(72)
4,321
(911)
0.5
11
PANAJI
GOA
JAIPUR
RAJASTHAN
13
KANPUR
181
(38)
161
(33)
635
(140)
47
(9)
714
(132)
167
(31)
3,554
(771)
3,325
(685)
1,614
(347)
0.4
12
1,376
(302)
230
(51)
514
(112)
68
(15)
37
(8)
125
(28)
5
(1)
285
(52)
27
(5)
1,617
(341)
348
(78)
0.2
25
(5)
123
(24)
41
(8)
190
(37)
UTTAR
PRADESH,
UTTRANCHAL
14 BHUBANESHW
ORISSA
AR
15
GUWAHATI
ASSAM,
ARUNACHAL
PRADESH,
MANIPUR,
MEGHALAYA,
MIZORAM,
NAGALAND,
TRIPURA
16
PATNA
BIHAR,
JHARKHAND
0.4
0.2
17
REGION NOT INDICATED

SUB. TOTAL
18
Note:
1.
2.
3
RBIS-NRI SCHEMES
(from 2000 to 2002)
GRAND TOTAL
29,344
(6,447)
97,320
(21,383)
0
53,851
(11,399)
165,146
(35,121)
0
21,833
(4,004)
121,907
(22,424)
0
97,320
(21,383)
165,146
(35,121)
121,907
(22,423)
220,233
(47,494)
896,380
(193,282)
533
(121)
896,913
(193,403)
24.6
100.00
-
Includes equity capital components only.

The Region-wise FDI inflows are classified as per RBIs Regional Office received FDI inflows,
furnished by RBI, Mumbai.
Represents, FDI inflows through acquisition of existing shares by transfer from residents to non
residents. For this, RBI Regional wise information is not provided by Reserve Bank of India.
II. FINANCI AL YEAR-WISE FDI INFLOWS D AT A:

A. AS PER INTERNATIONAL BEST PRACTICES:
(Data on FDI have been revised since 2000-01 with expended coverage to approach International Best Practices)
(Amount US$ million)
Sr.
No.
Financial Year
(April-March)
FOREIGN DIRECT INVESTMENT (FDI)

Equity
ReOther FDI FLOWS INTO
invested
capital
INDIA
FIPB Route/ Equity
earnings
+
RBIs
capital of
%age
+
Automatic unicorpora
growth
Route/
Total FDI
ted bodies
over
Acquisition
Flows
previous
#
Route
year
(in US$
terms)
Investment
by F II s
Foreign
FINANCIAL YEARS 2000-01 to 2014-13 (up to March, 2015)
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
2000-01
2,339
61
1,350
279
4,029
1,847
2001-02
3,904
191
1,645
390
6,130
(+) 52 %
1,505
2002-03
2,574
190
1,833
438
5,035
(-) 18 %
377
2003-04
2,197
32
1,460
633
4,322
(-) 14 %
10,918
2004-05
3,250
528
1,904
369
6,051
(+) 40 %
8,686
2005-06
5,540
435
2,760
226
8,961
(+) 48 %
9,926
2006-07
15,585
896
5,828
517
22,826 (+) 146 %
3,225
2007-08
24,573
2,291
7,679
300
34,843
(+) 53 %
20,328
2008-09
31,364
702
9,030
777
41,873
(+) 20 % (-) 15,017
2009-10 (P) (+)
25,606
1,540
8,668
1,931
37,745
(-) 10 %
29,048
2010-11 (P) (+)
21,376
874
11,939
658
34,847
(-) 08 %
29,422
2011-12 (P)
34,833
1,022
8,206
2,495
46,556
(+) 34 %
16,812
2014-13 (P)
21,825
1,059
11,025
2,951
36,860
27,583
(up to March, 2015)
Source:
RBIs
May, 2015 dt.9,821
13.05.201573,327
(Table No.11,964
34 FOREIGN
CUM
ULAT(i)
IVE TOT
AL Bulletin
194,966
290,078INVESTMENT
144,654
INFLOWS).
(from April, 2000 to March
(ii)
Inflows under the acquisition of shares in March, 2011, August, 2011 & October, 2011, include
2015)
net FDI on account of transfer of participating interest from Reliance Industries Ltd. to BP
Exploration (Alpha).
(iii)
RBI had included Swap of Shares of US$ 3.1 billion under equity components during December
2006.
(iv)
Monthly data on components of FDI as per expended coverage are not available. These data,
therefore, are not comparable with FDI data for previous years.
(v)
Figures updated by RBI up to March, 2015.
# Figures for equity capital of unincorporated bodies for 2014-15 are estimates. (P) All figures are
provisional
+ Data in respect of Re-invested earnings & Other capital for the years 2009- 10, 2014-15 & 2014-13
are estimated as average of previous two years.
B. DIPPS FINANCIAL YEAR-WISE FDI EQUITY INFLOWS:

(As per DIPPs FDI data base equity capital components only):
Sr.
Financial Year
Amount of FDI Inflows
Nos
(April March)
FINANCIAL YEARS 2000-01 to 2014-13 (up to

March, 2015)
In Rs crores
In US$ million
%age growth over

previous year
(in terms of US $)
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
Note:
2000-01
2001-02
2002-03
2003-04
2004-05
2005-06
2006-07
2007-08
2008-09 *
2009-10 #
2014-15 #
2011-12 # ^
2014-13 #
(from April, 2014 to March, 2015)
CUMULATIVE TOTAL
(from April, 2000 to March, 2015)
(i)
(ii)
10,733
2,463
18,654
12,871
10,064
14,653
24,584
56,390
98,642
142,829
123,120
97,320
165,146
121,907
4,065
2,705
2,188
3,219
5,540
12,492
24,575
31,396
25,834
21,383
35,121
22,423
( + ) 65 %
( - ) 33 %
( - ) 19 %
( + ) 47 %
( + ) 72 %
(+ )125 %
( + ) 97 %
( + ) 28 %
( - ) 18 %
( - ) 17 %
(+) 64 %
-
896,913
193,404
Including amount remitted through RBIs-NRI Schemes (2000-2002).

FEDAI (Foreign Exchange Dealers Association of India) conversion rate from rupees to US dollar
applied, on the basis of monthly average rate provided by RBI (DEPR), Mumbai.
# Figures for the years 2009-10, 2014-15, 2011-12 & 2014-13 (from April, 2014 to August, 2014) are
provisional subject to reconciliation with RBI.
^ Inflows for the month of March, 2014 are as reported by RBI, consequent to the adjustment made in the
figures of March, 11, August, 11 and October, 11.
* An additional amount of US$ 4,035 million pertaining to the year 2008-09, since reported by RBI, has
been included in FDI data base from February, 2014.
I.
STATEMENT ON COUNTRY-WISE FDI EQUITY INFLOWS

APRIL, 2000 TO MARCH, 2015
Sr.
No.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
Country
Mauritius
Singapore
United Kingdom
Japan
U.S.A
Netherlands
Cyprus
Germany
France
UAE
Switzerland
Spain
South Korea
Italy
Hong Kong
Sweden
Caymen Islands
British Virginia
Indonesia
Poland
Malaysia
Australia
The Bermudas
Belgium
Luxembourg
Russia
Canada
Oman
Denmark
China
Finland
Austria
Ireland
Chile
Morocco
Norway
South Africa
Thailand
British Isles
West Indies
Taiwan
Mexico
Turkey
Israel
Fazlani Altius Business School [Batch : 2015-2015]
Amount of Foreign Direct Investment

(In Rs crore) Inflows(In US$ million)
341,124.86
73,666.11
90,182.32
19,460.35
80,458.61
17,548.55
70,094.45
14,550.29
50,922.68
11,121.11
42,378.39
8,965.08
32,328.14
6,889.33
25,512.17
5,480.30
16,864.63
3,572.99
11,307.02
2,422.47
11,064.28
2,367.02
6,960.69
1,463.19
5,821.17
1,231.55
5,258.45
1,169.48
4,769.75
1,028.74
4,604.83
982.37
3,755.52
877.74
3,604.01
795.76
2,825.48
610.30
2,987.28
568.79
2,730.13
549.45
2,478.02
535.06
2,252.20
502.07
2,277.18
491.86
2,197.27
473.03
2,236.55
468.17
1,954.65
425.67
1,622.44
352.02
1,645.73
342.61
1,428.48
278.31
1,301.95
273.89
895.05
187.64
687.66
154.23
654.72
141.07
649.65
136.99
607.06
126.18
564.27
120.71
513.66
111.10
451.33
98.37
348.17
78.28
306.60
65.70
345.83
64.97
279.53
59.66
247.93
55.69
Page 28
%age with total

FDI Inflows (+)
38.11
10.07
9.08
7.53
5.75
4.64
3.56
2.84
1.85
1.25
1.22
0.76
0.64
0.61
0.53
0.51
0.45
0.41
0.32
0.29
0.28
0.28
0.26
0.25
0.24
0.24
0.22
0.18
0.18
0.14
0.14
0.10
0.08
0.07
0.07
0.07
0.06
0.06
0.05
0.04
0.03
0.03
0.03
0.03

45
46
47
48
49
50
51
52
53
54
55
56
57
58
59
60
61
62
63
64
65
66
67
68
69
70
71
72
73
74
75
76
77
78
79
80
81
82
83
84
85
86
87
88
89
90
91
92
93
94
St. Vincent
Saudi Arabia
Panama
Korea(North)
Saint Kitts & Nevis
New Zealand
Philippines
Bahamas
Sri Lanka
Jordan
Portugal
Iceland
Kenya
Brazil
Virgin Islands(US)
Gibraltar
Seychelles
Kuwait
Kazakhstan
Czech Republic
Bahrain
Liberia
Malta
Channel Islands
Belarus
Nigeria
Hungary
Argentina
Myanmar
Isle of Man
Slovenia
Liechtenstein
Belize
Maldives
Slovakia
Rep. of Fiji Islands
Romania
Ghana
Tunisia
Guersney
Greece
Uruguay
Scotland
Qatar
West Africa
Nepal
Yemen
Monaco
Egypt
Tanzania
254.02
193.91
185.36
187.15
147.88
145.92
168.58
141.68
138.45
155.03
119.72
93.72
98.45
100.43
101.10
83.67
86.99
84.96
81.11
74.81
130.53
64.54
58.39
57.20
49.93
49.48
47.86
46.23
35.75
38.09
39.07
29.90
25.14
24.72
22.62
22.30
23.16
21.13
19.84
23.27
18.78
16.06
13.51
14.23
12.31
9.12
7.74
7.49
7.30
6.31
Page 29
49.67
40.93
40.61
36.94
33.53
32.62
31.24
30.74
29.45
28.57
25.00
21.14
21.07
20.97
20.83
19.51
18.24
17.95
17.42
17.36
29.23
14.56
12.78
12.71
12.17
10.44
10.30
10.15
8.96
8.49
8.24
6.43
5.52
5.49
5.22
5.07
4.60
4.46
4.31
4.20
3.72
3.63
2.99
2.84
2.47
1.93
1.87
1.52
1.43
1.41
0.03
0.02
0.02
0.02
0.02
0.02
0.02
0.02
0.02
0.01
0.01
0.01
0.01
0.01
0.01
0.01
0.01
0.01
0.01
0.01
0.01
0.01
0.01
0.01
0.01
0.01
0.01
0.01
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00

95
96
97
98
99
100
101
102
103
104
105
106
107
108
109
110
111
112
113
114
115
116
117
118
119
120
121
122
123
124
125
126
127
128
129
130
131
132
133
134
135
136
137
138
139
Colombia
Ukraine
Uganda
Cuba
Guyana
Vanuatu
Bermuda
Togolese Republic
Congo (DR)
Croatia
Aruba
Lebanon
Bulgaria
Estonia
Anguilla
Yugoslavia
Vietnam
Jamaica
Iraq
Zambia
Iran
Libya
Latvia
Mongolia
Sudan
Peru
Bangladesh
Afghanistan
Botswana
St. Lucia
Georgia
East Africa
Bolivia
Costa Rica
Kyrgyzstan
Trinidad & Tobago
Cameroon
Djibouti
Venezuela
Barbados
Muscat
FII's
NRI *
Country Details Awaited
SUB.-TOTAL
RBIS- NRI SCHEMES (2000GRAND 2002)
TOTAL
5.36
5.06
5.06
4.73
4.60
4.41
3.45
3.08
2.41
2.29
1.96
1.87
1.69
1.31
1.46
1.13
1.14
1.00
0.85
0.67
0.47
0.28
0.27
0.27
0.24
0.20
0.16
0.12
0.13
0.06
0.02
0.02
0.01
0.01
0.01
0.01
0.01
0.00
0.00
0.00
0.00
0.25
20,383.66
30,854.20
896,379.66
533.06
896,912.72
Page 30
1.17
1.12
1.10
1.04
1.00
0.94
0.64
0.60
0.54
0.52
0.43
0.39
0.36
0.30
0.29
0.24
0.24
0.22
0.19
0.15
0.10
0.07
0.06
0.06
0.05
0.04
0.03
0.03
0.02
0.01
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.06
4,684.25
6,960.47
193,281.91
121.33
193,403.24
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
2.42
3.65
100.00
-

J. STATEMENT ON SECTOR-WISE FDI EQUITY INFLOWS
APRIL, 2000 TO MARCH, 2015
Sr.
No
1
Sector
SERVICES SECTOR
(Fin., Banking, Insurance, Non Fin/Business,
Outsourcing, R&D, Courier, Tech.
Testing and Analysis, Other)
CONSTRUCTION DEVELOPMENT
Townships, housing, built-up infrastructure and
construction-development projects
Amount of FDI Inflows

(In Rs crore) (In US$ million)
172,275.31
37,234.60
%age with total

FDI Inflows (+)
19.26
101,049.13
22,080.20
11.42
TELECOMMUNICATIONS
58,732.23
12,856.06
6.65
COMPUTER SOFTWARE & HARDWARE
52,774.07
11,691.10
6.05
DRUGS & PHARMACEUTICALS
48,879.53
10,318.17
5.34
40,495.55
8,880.83
4.59
CHEMICALS
(OTHER THAN FERTILIZERS)
AUTOMOBILE INDUSTRY
39,169.94
8,294.85
4.29
8
9
10
POWER
METALLURGICAL INDUSTRIES
HOTEL & TOURISM
36,136.88
34,814.13
33,260.03
7,834.22
7,507.07
6,631.25
4.05
3.88
3.43
11
12
13
PETROLEUM & NATURAL GAS

TRADING
INFORMATION & BROADCASTING
(INCLUDING PRINT MEDIA)
ELECTRICAL EQUIPMENTS
CEMENT AND GYPSUM PRODUCTS
NON-CONVENTIONAL ENERGY
MISCELLANEOUS MECHANICAL &
ENGINEERING INDUSTRIES
INDUSTRIAL MACHINERY
CONSULTANCY SERVICES
CONSTRUCTION (INFRASTRUCTURE)
ACTIVITIES
FOOD PROCESSING INDUSTRIES
24,808.41
18,646.51
15,495.69
5,381.48
3,955.80
3,284.21
2.78
2.05
1.70
14,668.58
11,779.04
12,901.12
10,522.52
3,182.70
2,626.43
2,591.22
2,318.71
1.65
1.36
1.34
1.20
11,017.51
9,692.72
9,741.06
2,302.14
2,095.13
2,090.41
1.19
1.08
1.08
8,681.38
1,811.06
0.94
PORTS
AGRICULTURE SERVICES
HOSPITAL & DIAGNOSTIC CENTRES
TEXTILES
(INCLUDING DYED,PRINTED)
ELECTRONICS
SEA TRANSPORT
FERMENTATION INDUSTRIES
RUBBER GOODS
MINING
PAPER AND PULP
(INCLUDING PAPER PRODUCTS)
PRIME MOVER
(OTHER THAN ELECTRICAL
GENERATORS)
6,717.38
7,797.73
7,437.93
5,689.76
1,635.08
1,608.69
1,597.33
1,226.02
0.85
0.83
0.83
0.63
5,466.74
5,492.51
5,095.29
5,824.46
4,368.18
4,056.14
1,198.22
1,194.50
1,134.63
1,134.44
998.30
865.54
0.62
0.62
0.59
0.59
0.52
0.45
4,131.80
848.68
0.44
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
Page 31

33
34
EDUCATION
SOAPS, COSMETICS & TOILET
PREPARATIONS
MACHINE TOOLS
MEDICAL AND SURGICAL APPLIANCES
CERAMICS
AIR TRANSPORT (INCLUDING AIR
FREIGHT)
DIAMOND,GOLD ORNAMENTS
GLASS
VEGETABLE OILS AND VANASPATI
FERTILIZERS
AGRICULTURAL MACHINERY
PRINTING OF BOOKS
(INCLUDING LITHO PRINTING INDUSTRY)
RAILWAY RELATED COMPONENTS
COMMERCIAL, OFFICE & HOUSEHOLD
EQUIPMENTS
EARTH-MOVING MACHINERY
LEATHER,LEATHER GOODS AND PICKERS
TEA AND COFFEE
(PROCESSING & WAREHOUSING COFFEE
& RUBBER)
3,332.97
3,115.54
684.35
632.39
0.35
0.33
2,967.09
2,913.92
2,195.59
2,022.00
622.99
604.47
508.13
449.26
0.32
0.31
0.26
0.23
1,810.74
1,942.21
1,893.72
1,425.53
1,423.25
1,257.51
390.76
389.07
384.94
297.90
296.42
272.32
0.20
0.20
0.20
0.15
0.15
0.14
1,246.35
1,181.76
270.33
254.83
0.14
0.13
769.05
527.88
456.01
174.95
107.43
101.21
0.09
0.06
0.05
50
RETAIL TRADING (SINGLE BRAND)
459.55
95.36
0.05
51
52
53
54
55
SCIENTIFIC INSTRUMENTS
TIMBER PRODUCTS
PHOTOGRAPHIC RAW FILM AND PAPER
INDUSTRIAL INSTRUMENTS
BOILERS AND STEAM GENERATING
PLANTS
SUGAR
COAL PRODUCTION
DYE-STUFFS
GLUE AND GELATIN
MATHEMATICAL,SURVEYING AND
DRAWING INSTRUMENTS
496.11
398.52
269.26
307.45
305.75
94.48
79.15
66.54
66.53
61.83
0.05
0.04
0.03
0.03
0.03
242.32
103.11
87.32
70.56
39.80
51.82
24.78
19.50
14.55
7.98
0.03
0.01
0.01
0.01
0.00
DEFENCE INDUSTRIES
COIR
MISCELLANEOUS INDUSTRIES
SUB -TOTAL
RBIS- NRI SCHEMES (2000-2002)
GRAND TOTAL
19.89
10.37
35,469.28
896,379.67
533.06
896,912.73
4.12
2.17
7,843.68
193,283.31
121.33
193,404.64
0.00
0.00
4.10
100
-
35
36
37
38
39
40
41
42
43
44
45
46
47
48
49
56
57
58
59
60
61
62
63
64.
FDI inflows data re-classified, as per segregation of data from April 2000 onwards.
+ Percentage of inflows worked out in terms of US$ & the above amount of inflows received through
FIPB/SIA route RBIs automatic route & acquisition of existing shares only.
FDI Sectoral data has been revalidated / reconciled in line with the RBI, which reflects minor changes in
the FDI figures (increase/decrease) as compared to the earlier published sectoral data.
Page 32

K. INDIAN ECONOMY
I.
Recent Trends in Indian Economy

1. The Indian economy has emerged with remarkable rapidity from the slowdown caused by the global
economic crisis and emerged stronger in 2015.The Indian economy is estimated to grow at 8.6 per cent in
2014-15 as compared to the growth rate of 8.0 per cent in 2013-14. The growth rate of 8.6 per cent in GDP
during 2014-15 has been due to the robust growth rates of over 8 per cent in the sectors of manufacturing,
construction, trade, hotels, transport and communication, financing, insurance, and, real estate and business
services.
2. The agriculture, forestry and fishing sector is likely to show a growth of 5.4 per cent during 2014-15, as
against the previous year's growth rate of 0.4 per cent. According to the Department of Agriculture and
Cooperation (DAC) of Government of India, production of food grains and oilseeds is expected to grow by
6.5 per cent and 11.9 per cent, respectively, as compared to the previous agriculture year. The production of
cotton and sugarcane is also expected to rise by 41.2 per cent and 15.2 per cent, respectively, in 2014-15.
Among the horticultural crops, production of fruits and vegetables is expected to increase by 4.1 per cent
and 3.8 per cent, respectively, during the year 2014-15.
3. The growth in mining and quarrying and manufacturing sectors during 2014-15 is expected to be 6.2 and
8.8 per cent respectively over previous year. According to the latest estimates available of the Index of
Industrial Production (IIP), mining and manufacturing registered growth rates of 8.0 per cent and 10.0 per
cent respectively during April-November, 2015. The estimated growth rate for construction sector is 8.0
per cent in 2014-15. The key indicators of construction sector, namely, cement production and steel
consumption have registered growth rates of 4.4 per cent and 8.8 per cent, respectively during AprilDecember, 2015.
4. The estimated growth in the trade, hotels, transport and communication sectors during 2014-15 is placed at
11.0 per cent, mainly on account of growth of 14.9 per cent in passengers handled in civil aviation, 21.3
per cent in air cargo handled and 40.9 per cent in stock of telephone connections. The sales of commercial
vehicles witnessed an increase of 34.1 per cent per cent in April-December, 2015. The financing, insurance,
real estate and business services sectors are expected to show a growth rate of 10.6 per cent during 201415, on account of 14.0 per cent growth in aggregate deposits and 22.6 per cent growth in bank credit during
April- November 2010 (against the respective growth rates of 18.6 per cent and 10.1 per cent in the
corresponding period of previous year). The growth rate of community, social and personal services during
2014-15 is estimated to be 5.7 per cent.
5. India's per capita income, often used to measure a country's standard of living, increased by 14.5 per cent
during 2013-14 to US$ 1038.2 as compared to US$ 906.9 in 2012-13.
Page 33
II.
Growth in Gross Domestic Product

Annual growth by economic activity in Gross Domestic Product (GDP) for the year 2014-15, released by
the Central Statistics office (CSO) of Government of India
S.No.
1
2
3
4
5
6
7
8
Industry
Agriculture, forestry & fishing

Mining & quarrying
Manufacturing
Electricity, gas & water supply
Construction
Trade, hotels, transport &
communication
Financing, insurance, real estate &
business services
Community, social & personal
services
Total GDP
GDP at Factor Cost

(2014-15)
at 2004-05 prices(US$
billion)
152.42
24.32
170.87
20.49
84.57
291.36
Percentage change over previous year

at current prices
(US$ billion)
295.25
40.13
228.09
22.15
129.21
379.65
at 2004-05
prices
5.4
6.2
8.8
5.1
8.0
11.0
at current
prices
23.2
18.2
14.5
8.6
17.0
16.7
187.89
285.97
10.6
26.5
141.87
216.87
5.7
11.3
1073.79
1597.49
8.6
18.3
Source: Central Statistics Office (CSO), Ministry of Statistics & Programme Implementation, Government of India
Page 34
III.
Economic Survey 2014-13

According to the Economic Survey 2014-15, tabled in Parliament on February 25, 2011 by the Union Finance
Minister, Mr. Pranab Mukherjee, the economy is expected to grow at 8.6 per cent in 2014-15 and is expected
to be around 9 per cent in the next fiscal year. The growth has been broad based with a rebound in the
Agriculture sector which is expected to grow around 5.4 per cent. Manufacturing and Services sector have
registered impressive gains. The Survey reports that the industrial output growth rate was 8.6 per cent while the
manufacturing sector registered a growth rate of 9.1 per cent in 2014-15.
The main highlights of the survey are:
1. Economy expected to grow at 8.6 per cent in 2014-15 and 9 per cent in next fiscal.
2. Growth broad based with rebound in Agriculture, continued momentum in manufacturing and private
services.
3. Fundamentals strong with savings and investments up, exports rising rapidly and inflation falling.
4. Agriculture likely to grow at 5.4 per cent in 2014-15.
5. Industrial output grows by 8.6 per cent.
6. Manufacturing sector registers 9.1 per cent growth.
7. Exports in AprilDecember 2010 up by 29.5 per cent.
8. Imports in AprilDecember 2010 up by 19 per cent.
9. Trade gap narrowed to US$ 82.01 billion in April-December 2010.
Page 35

10. 59 per cent rise in Net Bank Credit.
11. Social programme spending stepped up by 5 percentage points of GDP over past 5 years.
12. 9.7 per cent growth of GDP at market prices.
13. Production of food grains estimated at 232.1 million tonnes.
14. Forex Reserves estimated at US$ 297.3 billion.
15. Gross Fiscal Deficit stands at 4.8 per cent of GDP
L. POTENTIAL FOR INVESTMENT IN INDIA

1. India presents a vast potential for overseas investment and is actively encouraging the entrance of foreign
players into the market. India is also one of the few markets in the world, which offers high prospects for
growth and earning potential in practically all areas of business.
2. Indias biotechnology sector is set to become a $10 billion industry by 2015, CMD of Biocon Ltd, Kiran
Mazumdar-Shaw said . She expects the industry to grow to $5 billion by next year. In 2008-09 it was $2.51
billion. Indias biotechnology industry is at an inflexion point, and has attained a critical mass,
Mazumdar-Shaw said. It now has a platform from where it can leapfrog and deliver exponential growth,
she said. India is also becoming the vaccine capital.Clinical trials, agri-biotech and bio-fuels are becoming
opportunities. There are a lot of growth drivers and trigger points which, she said, will deliver in the next
five years.
3. With the launch of video telephony, by BSNL and Sai Info Systems (SIS), will boost demand for
broadband connection, Sam Pitroda, advisor to Prime Minister on public information, infrastructure and
Page 36

innovations, expects the number to hit 100 million in next five years. "The service is expected to
revolutionize the telecom sector and take it to the next level. Globally with video phones have become an
integral part of life. The service will be provided and marketed by SIS while the connectivity for the
service will be provided by BSNL. BSNL will also market it as another value added service to its large
broadband customer base," said Vijay Mandora, director, SIS.
4. Tumbling voice tariffs contributing to the declining average revenue per user (ARPU) rates, will result in
SMS volumes to reach 191.6 billion in India by 2015, predicts Gartner. By 2015, the country would have
more than 750 million mobile connections; therefore the SMS usage per user would essentially drop.
However, overall large base of mobile connections would support this SMS volume. Strong organic growth
continues in Asias developing markets, with marginal subscribers turning to low-cost messaging as an
entry-level service. In the mature markets of the Asia-Pacific region, SMS has seen sustained healthy
growth as a result of steady price declines and increasingly generous SMS and data bundles," said
Madhusudan Gupta, senior research analyst at Gartner. SMS contributes around 8% to value added services
(VAS), which in turn contributes 10-12% of an operators revenue.
5. The Indian auto sector is likely to witness an overall growth of 10% - 12% in sales during 2010 and a faster
recovery in expected in passenger vehicle (PV) volumes of 12% - 14% compared with 5% - 6% for the
commercial vehicle (CV) segment. The positive outlook for demand could result in a sharp increase in
capex plans, which could offset the positive impact on credit profiles of higher volumes and lower
inventories, said Fitch Ratings. The PV rebound has been supported by an improving liquidity scenario and
restoration of consumer confidence; modest growth in industrial production, together with the government
stimulus, has brought about stability in CV sales, though at lower levels than for PVs. Domestic CV sales
grew by 22.3% during April-December 2009 compared with same period in 2008, building on the recovery
in demand beginning Q4 09. However, growth trends have distinctly varied within the CV segment depending on the tonnage capacity and end-use, as light commercial vehicles (LCVs) have been able to
maintain their ground while medium and heavy commercial vehicles (M&HCVs) continued to face
pressure due to the decline in industrial output. The M&HCV segment is now stabilizing with the higher
industrial production, while the LCV segment is showing a more rapid recovery. Fitch expects the full-year
2010 numbers to reveal moderate growth in the range of 5% - 6% for domestic sales, with the first few
months being driven by regulatory guidelines.
6. The Union food processing ministry has set a target of attracting investments to the tune of Rs 1 lakh crore
in the sector by 2015.Subodh Kant Sahai, Union food processing minister, said: We are expecting
investments of Rs 1 lakh crore in the next five years. We are planning to increase food processing to 20%
of the total fruits and vegetable produced in the country. According to him, food processing has grown by
10% in India while value-added products have grown by 10-15% in the last five years. We are looking at a
Page 37

growth of 35% in value-added production by 2015, Sahai said.
7. The 234 million tonne per annum (mtpa) Indian cement industry, which witnessed a double digit dispatch
growth in December 2009 and an overall growth thanks to infrastructure and real estate projects, is set to
add 43.2 mtpa capacity during the next 15 months (January 2010 to March 2011).South India, which has
already started feeling the heat of oversupply, will add the maximum capacity of 17.6 million tonne during
that period. The next in line is the northern region, which will add 9.6 mt. The western, central and eastern
regions will add 9 mt, 3 mt and 4 mt, respectively. The southern market with 18 players having capacity
of 1mtpa or more is the most fragmented one in India. Capacities of three new players (Raghuram Cement,
Jayajyothi and JSW Cement with more than 2 mtpa each) will stabilize in the next 6-9 months. With sharp
price cuts, new producers may find it difficult to break even, and this would likely to prompt some
consolidation. All the three new producers are unlikely to participate in consolidation, J Radhakrishnan,
analyst with IIFL, said in his report.
8. The healthcare industry in the country, which comprises hospital and allied sectors, is projected to grow
23% per annum to touch $77-billion mark by 2014 from the current estimated size of $35 billion,
according to a Yes Bank and Assocham report. The sector has registered a growth of 9.3% between 20002009, comparable to the sectorial growth rate of other emerging economies such as China, Brazil and
Mexico. The growth in the sector would be driven by healthcare facilities, both private and public sector,
medical diagnostic and pathlabs and the medical insurance sector. Of the sum, diagnostic and pathology
services would account for $2.5 billion in 2014, more than double its estimated current size of $1billion.
The growth in the segment is expected to be driven by consolidation in the industry and increasing
insurance penetration among the countrys population. Healthcare facilities, inclusive of public and private
hospitals, the core sector, around which the healthcare sector is centered, would continue to contribute over
70% of the total sector and touch a figure of $54.7 billion by 2014.The medical insurance sector would
account for another $ 3 billion in the next three years, up from the estimated current size of $1 billion.
9. Steve King, CEO of Zenith Optimedia Worldwide feels that new and emerging advertising markets like
India and China will power the global industrys recovery, on the back of positive signals from developed
markets like US, Europe. India, with an approximate 10% growth, will certainly be in the top ten
advertising markets in absolute dollar terms by 2015, he told. Zenith Optimedia, the worlds third largest
media-buying agency and an enterprise under the Paris-based Publics Group is upbeat about India. It has
brought fresh business worth $100 million in the country this year. India figures amongst Zenith
Optimedias 20 largest markets globally, but over the past five years, it has been among the top three fastest
growing ones. Most of our markets are between 15 to 20 years old, so despite being here for only five
years, this market has responded very well. Our focus here will be on winning local clients, apart from the
international ones. By the next five years, we will have considerably closed the gap on the top two market
leaders here, King said.
Page 38
M. ADVANTAGE IN INDIA
1. World's largest democracy with 1.2 billion people.
2. Stable political environment and responsive administrative set up.
3. Well established judiciary to enforce rule of law.
4. Land of abundant natural resources and diverse climatic conditions.
5. Rapid economic growth: GDP to grow by 8.5% in 2014-15* and 9.0% in 2011-12.
6. India's growth will start to outpace China\'s within three to five years and hence will become the fastest
large economy with 9-10% growth over the next 20-25 years (Morgan Stanley).
7. Investor friendly policies and incentive based schemes.
8. Second most attractive Foreign Direct Investment (FDI) location in the world: India received a total of US$
25.9 billion of FDI in 2009-10.
9. Healthy macro-economic fundamentals: Investment rate is expected to be 37% in 2014-15 and 38.4% in
2011-12 while Domestic Savings rate is expected to be 34% in 2014-15 and 36% in 2011-12.
10. India's economy will grow fivefold in the next 20 years (McKinsey).
11. Cost competitiveness: low labour costs.
12. Total labour force of nearly 530 million.
Page 39

13. Large pool of skilled manpower; strong knowledge base with significant English speaking population.
14. Young country with a median age of 30 years by 2025: India\'s economy will benefit from this
"demographic dividend".
15. The proportion of population in the working age group (15-59 years) is likely to increase from
approximately 58% in 2001 to more than 64% by 2021.
16. Huge untapped market potential.
17. The urban population of India will double from the 2001 census figure of 290m to approximately 590m by
2030 (McKinsey).
18. Progressive simplification and rationalization of direct and indirect tax structures.
19. Reduction in import tariffs.
20. Full current account convertibility.
21. Compliance with WTO norms.
22. Robust banking and financial institutions.

"* India's financial year is from April to March. 2014-15 above means April 2010-March 2011."
I. Indian Economy
India has undergone a paradigm shift owing to its competitive stand in the world. The Indian economy is on a
robust growth trajectory and boasts of a stable annual growth rate, rising foreign exchange reserves and
booming capital markets among others.
Indian economy is estimated to grow at 8.6 percent in 2014-15 as compared to the growth rate of 8.0 percent
in 2009-10. These GDP figures are based at factor cost at constant (2004-05) prices in the year 2014-15.The
growth rate of 8.6 per cent in GDP during 2014-15 has been due to the robust growth rates of over 8 per cent
in the sectors of manufacturing, construction, trade, hotels, transport and communication, financing,
insurance, and, real estate and business services. Agriculture sector registered a growth rate of 5.4 percent in
2009-10. A growth rate of 18.3 percent is estimated for GDP at current prices in the year 2014-15.
Page 40
II. Agriculture Sector

The agriculture, forestry and fishing sector is likely to show a growth of 5.4 per cent in its GDP during 201415, as against the previous years growth rate of 0.4 per cent. The estimate of GDP from agriculture in 201415, according to the Department of Agriculture and Cooperation (DAC),production of food grains and oilseeds
is expected to grow by 6.5 per cent and 11.9 per cent, respectively, as compared to the previous agriculture
year. The production of cotton and sugarcane is also expected to rise by 41.2 per cent and 15.2 per cent,
respectively, in 2014-15. Among the horticultural crops, production of fruits and vegetables is expected to
increase by 4.1 per cent and 3.8 per cent, respectively, during the year 2014-15.
III.
Industry Sector
The growth in GDP for mining and quarrying and manufacturing sectors during 2014-15 is expected to be 6.2
and 8.8 percent respectively over previous year. According to the latest estimates available on the Index of
Industrial Production (IIP), the index of mining and manufacturing registered growth rates of 8.0 per cent and
10.0 per cent during April-November, 2010. The estimated growth rate for construction sector is 8.0 percent
in 2014-15. The key indicators of construction sector, namely, cement production and steel consumption have
registered growth rates of 4.4 per cent and 8.8 per cent, respectively during April- December, 2010.
IV.
Services Sector
The estimated growth in GDP for the trade, hotels, transport and communication sectors during 2014-15 is
placed at 11.0 per cent, mainly on account of growth during April- November, 2014-15 of 14.9 per cent in
passengers handled in civil aviation, 21.3 per cent in air cargo handled and 40.9 per cent in stock of
telephone connections. The sales of commercial vehicles witnessed an increase of 34.1 per cent per cent in
April-December, 2010. The financing, insurance, real estate and business services sector is expected to show
a growth rate of 10.6 per cent during 2014-15, on account of 14.0 per cent growth in aggregate deposits and
22.6 per cent growth in bank credit during April- November 2010 (against the respective growth rates of 18.6
per cent and 10.1 per cent in the corresponding period of previous year). The growth rate of community,
social and personal services during 2014-15 is estimated to be 5.7 per cent.
Page 41
Literature Review
Page 42
N.
FDI POLICY FRAMEWORK

Policy regime is one of the key factors driving investment flows to a country. Apart from underlying macro
fundamentals, ability of a nation to attract foreign investment essentially depends upon its policy regime whether it promotes or restrains the foreign investment flows. This section undertakes a review of Indias FDI
policy framework and makes a comparison of Indias policy vis--vis that of select EMEs.
1.
FDI Policy Framework in India

There has been a sea change in Indias approach to foreign investment from the early 1990s when it began
structural economic reforms encompassing almost all the sectors of the economy.
Pre-Liberalization Period
Historically, India had followed an extremely cautious and selective approach while formulating FDI policy in
view of the dominance of import-substitution strategy of industrialization. With the objective of becoming
self-reliant, there was a dual nature of policy intention FDI through foreign collaboration was welcomed in
the areas of high technology and high priorities to build national capability and discouraged in low technology
areas to protect and nurture domestic industries. The regulatory framework was consolidated through the
enactment of Foreign Exchange Regulation Act (FERA), 1973 wherein foreign equity holding in a joint
venture was allowed only up to 40 per cent. Subsequently, various exemptions were extended to foreign
companies engaged in export oriented businesses and high technology and high priority areas including
allowing equity holdings of over 40 per cent. Moreover, drawing from successes of other country experiences
in Asia, Government not only established special economic zones (SEZs) but also designed liberal policy and
provided incentives for promoting FDI in these zones with a view to promote exports. As India continued to
be highly protective, these measures did not add substantially to export competitiveness. Recognising these
limitations, partial liberalisation in the trade and investment policy was introduced in the 1980s with the
objective of enhancing export competitiveness, modernisation and marketing of exports through Transnational Corporations (TNCs). The announcements of Industrial Policy (1980 and 1982) and Technology
Policy (1983) provided for a liberal attitude towards foreign investments in terms of changes in policy
directions. The policy was characterized by de-licensing of some of the industrial rules and promotion of
Indian manufacturing exports as well as emphasizing on modernization of industries through liberalized
imports of capital goods and technology. This was supported by trade liberalization measures in the form of
tariff reduction and shifting of large number of items from import licensing to Open General Licensing
(OGL).
Post-Liberalization Period
A major shift occurred when India embarked upon economic liberalization and reforms program in 1991
aiming to raise its growth potential and integrating with the world economy. Industrial policy reforms
gradually removed restrictions on investment projects and business expansion on the one hand and allowed
increased access to foreign technology and funding on the other. A series of measures that were directed
towards liberalizing foreign investment included:
(i)
Introduction of dual route of approval of FDI RBIs automatic route and Governments
approval (SIA/FIPB) route,
Page 43

(ii)
Automatic permission for technology agreements in high priority industries and removal of
restriction of FDI in low technology areas as well as liberalization of technology imports,
(iii)
Permission to Non-resident Indians (NRIs) and Overseas Corporate Bodies (OCBs) to invest
up to 100 per cent in high priorities sectors,
(iv)
Hike in the foreign equity participation limits to 51 per cent for existing companies and
liberalization of the use of foreign brands name and
(v)
Signing the Convention of Multilateral Investment Guarantee Agency (MIGA) for protection
of foreign investments. These efforts were boosted by the enactment of Foreign Exchange
Management Act (FEMA), 1999 [that replaced the Foreign Exchange Regulation Act (FERA),
1973] which was less stringent. This along with the sequential financial sector reforms paved
way for greater capital account liberalization in India.
Investment proposals falling under the automatic route and matters related to FEMA are dealt with by RBI,
while the Government handles investment through approval route and issues that relate to FDI policy per se
through its three institutions, viz., the Foreign Investment Promotion Board (FIPB), the Secretariat for
Industrial Assistance (SIA) and the Foreign Investment Implementation Authority (FIIA).
FDI under the automatic route does not require any prior approval either by the Government or the Reserve
Bank. The investors are only required to notify the concerned regional office of the RBI within 30 days of
receipt of inward remittances and file the required documents with that office within 30 days of issuance of
shares to foreign investors. Under the approval route, the proposals are considered in a time-bound and
transparent manner by the FIPB. Approvals of composite proposals involving foreign investment/ foreign
technical collaboration are also granted on the recommendations of the FIPB. Current FDI policy in terms of
sector specific limits has been summarized in Table 3 below:
Table 3: Sector Specific Limits of Foreign Investment in India
Sector
A. Agriculture
1. Floriculture, Horticulture, Development of
Seeds, Animal Husbandry, Pisciculture,
Aquaculture, Cultivation of vegetables &
mushrooms and services related to agro and
allied sectors.
2. Tea sector, including plantation
FDI Cap/Equity
Entry Route
100%
Automatic
100%
FIPB
(FDI is not allowed in any other agricultural sector /activity)

B. Industry
1. Mining covering exploration and mining of
diamonds & precious stones; gold, silver and
minerals.
2. Coal and lignite mining for captive
consumption by power projects, and iron &
steel, cement production.
100%
Automatic
100%
Automatic
Page 44
Other Conditions

3. Mining and mineral separation of titanium
bearing minerals
100%
FIPB
C. Manufacturing
1. Alcohol- Distillation & Brewing
2. Coffee & Rubber processing & Warehousing.
Automatic
100%
100%
Automatic
3. Defence production
26%
FIPB
4. Hazardous chemicals and isocyanates
100%
Automatic
5. Industrial explosives -Manufacture
100%
Automatic
6. Drugs and Pharmaceuticals
100%
Automatic
7. Power including generation (except Atomic 100%

Automatic
energy); transmission, distribution and power
trading.
(FDI is not permitted for generation, transmission & distribution of electricity produced
in atomic power plant/atomic energy since private investment in this activity is prohibited
and reserved for public sector.)
D.Services
1. Civil aviation (Greenfield projects and 100%
Automatic
Existing projects)
2. Asset Reconstruction companies
49%
FIPB
3. Banking (private) sector
4. NBFCs : underwriting, portfolio management
services, investment advisory services, financial
consultancy, stock broking, asset management,
venture capital, custodian, factoring, leasing and
finance, housing finance, forex broking, etc.
5. Broadcasting
a. FM Radio
b. Cable network; c. Direct to home; d.
Hardware facilities such as up-linking, HUB.
e. Up-linking a news and current affairs TV
Channel
6. Commodity Exchanges
74% (FDI+FII).
FII not to exceed 49%
Automatic
100%
Automatic
20%
49% (FDI+FII)
FIPB
100%
49% (FDI+FII) (FDI
26 % FII 23%)
26%
FIPB
8. Petroleum and natural gas :

a. Refining
49% (PSUs).
100% (Pvt.
Companies)
9. Print Media
a. Publishing of newspaper and periodicals
dealing with news and current affairs
b. Publishing of scientific magazines / speciality
journals/periodicals
10. Telecommunications
a. Basic and cellular, unified access services,
national / international long-distance, V-SAT,
public mobile radio trunked services (PMRTS),
26%
FIPB (for
PSUs).
Automatic
(Pvt.)
FIPB
100%
FIPB
74% (including FDI,

FII, NRI, FCCBs,
ADRs/GDRs,
convertible preference
Automatic up
to 49% and
FIPB beyond
49%.
7. Insurance
s.t.minimum
capitalization
norms
Page 45
Automatic
Clearance from
IRDA
S.t.guidelines by
Ministry of
Information &
broadcasting

global mobile personal communication services shares, etc.
(GMPCS) and others.
Sectors where FDI is Banned
1. Retail Trading (except single brand product retailing);
2. Atomic Energy;
3. Lottery Business including Government / private lottery, online lotteries etc;
4. Gambling and Betting including casinos etc.;
5. Business of chit fund;
6. Nidhi Company;
7. Trading in Transferable Development Rights (TDRs);
8. Activities/sector not opened to private sector investment;
9. Agriculture (excluding Floriculture, Horticulture, Development of seeds, Animal Husbandry, Pisciculture and
cultivation of vegetables, mushrooms etc. under controlled conditions and services related to agro and allied
sectors) and Plantations (Other than Tea Plantations);
10. Real estate business, or construction of farm houses;
11. Manufacturing of Cigars, cheroots, cigarillos and cigarettes, of tobacco or of tobacco or of tobacco
substitutes.
2. FDI Policy: The International Experience

Foreign direct investment is treated as an important mechanism for channelizing transfer of capital and
technology and thus perceived to be a potent factor in promoting economic growth in the host countries.
Moreover, multinational corporations consider FDI as an important means to reorganise their production
activities across borders in accordance with their corporate strategies and the competitive advantage of host
countries. These considerations have been the key motivating elements in the evolution and attitude of EMEs
towards investment flows from abroad in the past few decades particularly since the eighties. This section
reviews the FDI policies of select countries to gather some perspective as to where does India stand at the
current juncture to draw policy imperatives for FDI policy in India.
China
Encouragement to FDI has been an integral part of the Chinas economic reform process. It has gradually
opened up its economy for foreign businesses and has attracted large amount of direct foreign investment.
Government policies were characterised by setting new regulations to permit joint ventures using foreign
capital and setting up Special Economic Zones (SEZs) and Open Cities.The concept of SEZs was extended
to fourteen more coastal cities in 1984.Favorable regulations and provisions were used to encourage FDI
inflow, especially export-oriented joint ventures and joint ventures using advanced technologies in 1986.
Foreign joint ventures were provided with preferential tax treatment, the freedom to import inputs such as
materials and equipment, the right to retain and swap foreign exchange with each other, and simpler
licensing procedures in 1986. Additional tax benefits were offered to export-oriented joint ventures and
those employing advanced technology.
Priority was given to FDI in the agriculture, energy, transportation, telecommunications, basic raw
materials, and high-technology industries, and FDI projects which could take advantage of the rich natural
resources and relatively low labour costs in the central and northwest regions.
Page 46
Chinas policies toward FDI have experienced roughly three stages: gradual and limited opening, active
promoting through preferential treatment, and promoting FDI in accordance with domestic industrial
objectives. These changes in policy priorities inevitably affected the pattern of FDI inflows in China.
Chile
In Chile, policy framework for foreign investment, embodied in the constitution and in the Foreign
Investment Statute, is quite stable and transparent and has been the most important factor in facilitating
foreign direct investment. Under this framework, an investor signs a legal contract with the state for the
implementation of an individual project and in return receives a number of specific guarantees and rights.
Foreign investors in Chile can own up to 100 per cent of a Chilean based company, and there is no time
limit on property rights. They also have access to all productive activities and sectors of the economy,
except for a few restrictions in areas that include coastal trade, air transport and the mass media.
Chile attracted investment in mining, services, electricity, gas and water industries and manufacturing.
Investors are guaranteed the right to repatriate capital one year after its entry and to remit profits at any
time.
Although Chiles constitution is based on the principle of non-discrimination, some tax advantages are
extended to foreign investors such as invariability of income tax regime, invariability of indirect taxes, and
special policy regime for large projects.
Malaysia
The Malaysian FDI regime is tightly regulated in that all foreign manufacturing activity must be licensed
regardless of the nature of their business.
Until 1998, foreign equity share limits were made conditional on performance and conditions set forth by
the industrial policy of the time.
In the past, the size of foreign equity share allowed for investment in the manufacturing sector hinged on
the share of the products exported in order to support the country's export-oriented industrial policy.
FDI projects that export at least 80 per cent of production or production involving advanced technology are
promoted by the state and no equity conditions are imposed. Following the crisis in 1997-98, the restriction
was abolished as the country was in need of FDI.
Page 47

Korea
The Korean government maintained distinctive foreign investment policies giving preference to loans over
direct investment to supplement its low level of domestic savings during the early stage of industrialisation.
Koreas heavy reliance on foreign borrowing to finance its investment requirements is in sharp contrast to
other countries.
The Korean Government had emphasised the need to enhance absorptive capacity as well as the
indigenisation of foreign technology through reverse engineering at the outset of industrialisation while
restricting both FDI and foreign licensing. This facilitated Korean firms to assimilate imported technology,
which eventually led to emergence of global brands like Samsung, Hyundai, and LG.
The Korean government pursued liberalised FDI policy regime in the aftermath of the Asian financial crisis
in 1997-98 to fulfil the conditionality of the International Monetary Fund (IMF) in exchange for standby
credit.
Several new institutions came into being in Korea immediately after the crisis. Invest Korea is Koreas
national investment promotion agency mandated to offer one-stop service as a means of attracting foreign
direct investment, while the Office of the Investment Ombudsman was established to provide investment
after-care services to foreign-invested companies in Korea. These are affiliated to the Korea Trade
Investment Promotion Agency.
Korea enacted a new foreign investment promotion act in 1998 to provide foreign investors incentives
which include tax exemptions and reductions, financial support for employment and training, cash grants
for R&D projects, and exemptions or reductions of leasing costs for land for factory and business
operations for a specified period.
One of the central reasons for the delays in the construction process in Korea is said to be the lengthy
environmental and cultural due diligence on proposed industrial park sites. (OECD, 2008).
Thailand
Thailand followed a traditional import-substitution strategy, imposing tariffs on imports, particularly on

finished products in the 1960s. The role of state enterprises was greatly reduced from the 1950s and
investment in infrastructure was raised. Attention was given to nurturing the institutional system necessary
for industrial development. Major policy shift towards export promotion took place by early 1970s due to
balance of payments problems since most of components, raw materials, and machinery to support the
production process, had to be imported.
Page 48
On the FDI front, in 1977 a new Investment Promotion Law was passed which provided the Board of
Investment (BOI) with more power to provide incentives to priority areas and remove obstacles faced by
private investors (Table 4). After the East Asian financial crisis, the Thai government has taken a very
favourable approach towards FDI with a number of initiatives to develop the industrial base and exports
and progressive liberalisation of laws and regulations constraining foreign ownership in specified
economic activities.
The Alien Business Law, which was enacted in 1972 and restricted majority foreign ownership in certain
activities, was amended in 1999. The new law relaxed limits on foreign participation in several professions
such as law, accounting, advertising and most types of construction, which have been moved from a
completely prohibited list to the less restrictive list of businesses.
To sum up, the spectacular performance of China in attracting large amount of FDI could be attributed to its
proactive FDI policy comprising setting up of SEZs particularly exports catering to the international market,
focus on infrastructure and comparative advantage owing to the low labour costs. A comparison of the FDI
policies pursued by select emerging economies, set out above, suggests that policies although broadly common
in terms of objective, regulatory framework and focus on technological upgradation and export promotion, the
use of incentive structure and restrictions on certain sectors, has varied across countries. While China and
Korea extend explicit tax incentives to foreign investors, other countries focus on stability and transparency of
tax laws. Similarly, while all the countries promote investment in manufacturing and services sector, China
stands out with its relaxation for agriculture sector as well. It is, however, apparent that though policies across
countries vary in specifics, there is a common element of incentivisation of foreign investment (Table 4).
Table 4: FDI Policy and Institutional Framework in Select Countries
China
Year of
Libera
lisatio
n
1979
Chile
1974
Objective
Incentives
Priority Sectors
Unique
features
Transformation
of
traditional
agriculture,
promotion
of
industrialization
, infrastructure
and
export
promotion.
Foreign joint ventures were provided

with preferential tax treatment.
Additional tax benefits to exportoriented joint ventures and those
employing advanced technology.
Privileged access was provided to
supplies of water, electricity and
transportation (paying the same
price as state-owned enterprises) and
to interest-free RMB loans.
Invariability of tax regime intended
to provide a stable tax horizon.
Agriculture, energy,
transportation,
telecommunications,
basic raw materials,
and high-technology
industries.
Setting up of
Special
Economic
Zones
All
productive
activities and sectors
of the economy,
except for a few
restrictions in areas
that include coastal
trade, air transport
and the mass media.
Does not use

tax incentives
to
attract
foreign
investment.
Technology
transfer, export
promotion and
greater domestic
competition.
Page 49

Korea
1998
Malaysi
a
1980s
Thailan
d
1977
Promotion
of
absorptive
capacity
and
indigenization
of
foreign
technology
through reverse
engineering at
the outset of
industrialization
while restricting
both FDI and
foreign
licensing.
Export
promotion
Businesses located in Foreign

Investment
Zone
enjoy
full
exemption of corporate income tax
for five years from the year in which
the initial profit is made and 50
percent reduction for the subsequent
two years. High-tech foreign
investments in the Free Economic
Zones are eligible for the full
exemption three years and 50
percent for the following two years.
Cash grants to high-tech green field
investment and R&D investment
subject to the government approval.
No specific tax incentives.
Manufacturing
services
and
Loan-based
borrowing to
an FDI-based
development
strategy till
late1990s.
Manufacturing
services.
and
Technology
transfer
and
export
promotion
No specific tax incentives. The Thai

Board of Investment has carried out
activities under the three broad
categories
to
promote
FDI.
1. Image building to demonstrate
how the host country is an
appropriate location for FDI.
2. Investment generation by
targeting investors through various
activities.
3. Servicing investors
Manufacturing
services
and
Malaysian
Industrial
Development
Authority was
recognised to
be one of the
effective
agencies
in
the
Asian
region
-
Page 50
3. Cross-Country Comparison of FDI Policies Where does India stand?

A true comparison of the policies could be attempted if the varied policies across countries could be reduced
to a common comparable index or a measure. Therefore, with a view to examine and analyse where does
India stand vis-a-vis other countries at the current juncture in terms of FDI policy framework, the present
section draws largely from the results of a survey of 87 economies undertaken by the World Bank in 2009
and published in its latest publication titled Investing Across Borders.
The survey has considered four indicators, viz., Investing across Borders, Starting a Foreign Business,
Accessing Industrial Land, and Arbitrating Commercial Disputes to provide assessment about FDI climate
in a particular country. Investing across Borders indicator measures the degree to which domestic laws
allow foreign companies to establish or acquire local firms. Starting foreign business indicator record the
time, procedures, and regulations involved in establishing a local subsidiary of a foreign company. Accessing
industrial land indicator evaluates legal options for foreign companies seeking to lease or buy land in a host
economy, the availability of information about land plots, and the steps involved in leasing land. Arbitrating
commercial disputes indicator assesses the strength of legal frameworks for alternative dispute resolution,
rules for arbitration, and the extent to which the judiciary supports and facilitates arbitration. Indias relative
position in terms of these four parameters vis--vis major 15 emerging economies, which compete with India
in attracting foreign investment, is set out in Tables 5A and 5B.
Following key observations could be made from this comparison:
A comparative analysis among the select countries reveals that countries such as Argentina, Brazil, Chile
and the Russian Federation have sectoral caps higher than those of India implying that their FDI policy is
more liberal.
The sectoral caps are lower in China than in India in most of the sectors barring agriculture and forestry
and insurance. A noteworthy aspect is that China permits 100 per cent FDI in agriculture while completely
prohibits FDI in media. In India, on the other hand, foreign ownership is allowed up to 100 per cent in
sectors like mining, oil and gas, electricity and healthcare and waste management.
India positioned well vis-a-vis comparable counterparts in the select countries in terms of the indicator
starting a foreign business. In 2009, starting a foreign business took around 46 days with 16 procedures in
India as compared with 99 days with 18 procedures in China and 166 days with 17 procedures in Brazil
(Table 5 B).
In terms of another key indicator, viz., accessing industrial land Indias position is mixed. While the
ranking in terms of indices based on lease rights and ownership rights is quite high, the time to lease
private and public land is one of the highest among select countries at 90 days and 295 days, respectively.
In China, it takes 59 days to lease private land and 129 days to lease public land. This also has important
bearing on the investment decisions by foreign companies.
Page 51
In terms of the indicator arbitrating commercial disputes India is on par with Brazil and the Russian
Federation. Although, the strength of laws index is fairly good, the extent of judicial assistance index is
moderate.
Table 5A: Investing Across Borders Sector wise Caps 2015

Country
Mini
ng,
oil
and
gas
Light
manuf
act
uring
Tele
comm
unicat
ions
Electrici
ty
Banking
Insura
nce
Trans
portation
Media
100
Agri
cul
ture
and
fores
try
100
Argentina
100
100
100
100
100
79.6
30
100
Health
care
and
waste
manag
ement
100
Brazil
100
100
100
100
100
100
100
68
30
100
50
Chile
100
100
100
100
100
100
100
100
100
100
100
China
75
100
75
49
85.4
62.5
50
49
83.3
85
India
100
50
81.5
74
100
87
26
59.6
63
83.7
100
Indonesia
97.5
72
68.8
57
95
99
80
49
85
82.5
Korea,
100
100
100
49
85.4
100
100
79.6
39.5
100
100
Malaysia
70
85
100
39.5
30
49
49
100
65
90
65
Mexico
50
49
100
74.5
100
49
54.4
24.5
100
100
Philippines
40
40
75
40
65.7
60
100
40
100
100
100
100
100
100
100
100
49
79.6
75
100
100
South
74
100
100
70
100
100
100
100
60
100
100
Thailand
49
49
87.3
49
49
49
49
49
27.5
66
49
Russian
Page 52
Constr
uction,
touris
m and
retail
Table 5B: Investing Across Borders Key Indicators 2015

Country
Starting a Foreign
Business
Time
(day
s)
Pro
ced
ures
(nu
mbe
r)
Accessing Industrial Land
Ease
of
establ
i
shme
nt
index
(0 =
min,
100 =
max)
Strengt
h of
lease
rights
index
(0 =
min,
100 =
max)
Strengt
h
of
owne
rship
rights
index
(0 =
min,
100 =
max)
Acces
s
to
land
infor
m
ation
index
(0 =
min,
100
=
max)
Arbitrating
Commercial
Disputes
Stre Eas Extent
n
e
gth
of
of
of
proc judici
laws ess
al
inde inde assista
x (0 x (0
nce
=
=
index
min, min,
(0 =
100 100
min,
=
=
100 =
max max max)
)
)
Avail
a
bility
of
land
infor
m
ation
index
Tim
e to
leas
e
priv
ate
land
(day
s)
Tim
e to
leas
e
pub
l
ic
land
(day
s)
48
112
63.5
72.2
55.1
50
18
65
79.3
100
44.4
(0 =
min,
100
=
max)
85
166
17
62.5
85.7
100
33.3
75
66
180
84.9
45.7
57.2
Chile
29
11
63.2
85.7
100
33.3
80
23
93
94.9
62.8
74.8
China
99
18
63.7
96.4
n/a
50
52.5
59
129
94.9
76.1
60.2
India
46
16
76.3
92.9
87.5
15.8
85
90
295
88.5
67.6
53.4
Indonesia
86
12
52.6
78.6
n/a
21.4
85
35
81
95.4
81.8
41.3
Korea,
17
11
71.1
85.7
100
68.4
70
10
53
94.9
81.9
70.2
Malaysia
14
11
60.5
78.5
87.5
23.1
85
96
355
94.9
81.8
66.7
Mexico
31
11
65.8
81.3
100
33.3
90
83
151
79.1
84.7
52.7
Philippin
es
Russian
80
17
57.9
68.8
n/a
23.5
87.5
16
n/a
95.4
87
33.7
31
10
68.4
85.7
100
44.4
90
62
231
71.6
76.1
76.6
Argentin
a
Brazil
Page 53

South
65
84.5
100
47.4
85
42
304
82.4
79
94.5
Thailand
34
60.5
80.7
62.5
27.8
70
30
128
84.9
81.8
40.8
Thus, a review of FDI policies in India and across major EMEs suggests that though Indias policy stance
in terms of access to different sectors of the economy, repatriation of dividend and norms for owning
equity are comparable to that of other EMEs, policy in terms of qualitative parameters such as time to
lease private land, access to land information and Extent of Judicial assistance are relatively more
conservative. Since time taken to set up a project adds to the cost and affect competitiveness, an otherwise
fairly liberal policy regime may turn out to be less competitive or economically unviable owing to
procedural delays. Thus, latter may affect the cross border flow of investible funds. But an assessment of
precise impact of these qualitative parameters on the flow of FDI is an empirical question. The following
section makes an attempt to quantify the impact of various factors that govern the flow of FDI in India.
O.
FDI FLOWS TO INDIA IN RECENT PERIOD

Distinct slowdown despite strong fundamentals Plausible Explanations
As stated above, global FDI flows moderated significantly since the eruption of global financial crisis in
2008, albeit with an uneven pattern across regions and countries. Though initially developing countries
showed some resilience, crisis eventually spread through the trade, financial and confidence channels and
FDI flows declined in both the advanced and developing economies during 2009. Subsequently, while FDI
flows to advanced countries continued to decline, FDI flows to many of the Latin American and Asian
countries witnessed strong rebound during 2015 on the back of improved corporate profitability and some
improvement in M&A activities.
FDI flows to India also moderated during 2014 but unlike trends in other EMEs, flows continued to
be sluggish during 2015 despite strong domestic growth ahead of global recovery. This raised concerns
for policy makers in India against the backdrop of expansion in the current account deficit.
Table 6: FDI Inflows in Select EMEs
(US$ billion)
Argentina
2011
6.5
34.6
12.5
25.5
6.9
29.1
South
Africa
5.7
2012
9.7
45.1
15.2
43.4
9.3
24.9
9.6
8.5
(50.2)
(30.3)
(21.1)
(70.3)
(34.5)
-(14.3)
(68.1)
-(24.7)
4.0
25.9
12.7
35.6
4.9
14.5
5.4
5.0
-(92.0)
-(14.3)
-(39.9)
-(49.4)
-(85.9)
-(200.8)
-(92.1)
-(120.2)
Q1-10
1.9
5.5
5.5
6.1
2.9
4.8
0.4
1.5
Q2-10
0.0
6.6
2.5
6.0
3.3
7.6
0.4
2.0
2013
Brazil
Chile
India
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Indonesia
Mexico
Thailand
11.3

Q3-10
1.9
10.5
5.3
6.7
3.4
2.4
0.1
1.5
Q4-10
0.9
25.9
1.9
5.3
3.7
2.8
0.7
2015
4.7
48.5
15.2
24.1
13.3
17.6
0.9
5.7
(17.5)
(87.3)
(19.7)
-(32.3)
(171.4)
(21.4)
-(80.4)
(14.0)
Note: Figures in brackets relate to percentage variation over the corresponding period of the previous year.
Source: IMF, BOP Statistics.
An analysis of trends in FDI flows during 2015 reveal that among the EMEs, countries such as Indonesia,
Thailand, Brazil, Argentina, Chile and Mexico registered increases in the range of 14-171 per cent during
2015 over 2009 (Table 6). In contrast, FDI inflows to India declined by 32 per cent, year-on-year, during
2015. This moderation in FDI inflows warrants a deeper examination of the causal factors from a crosscountry perspective.
An analysis of key macroeconomic indicators in the select EMEs reveals that Indias macroeconomic
performance compares with other EMEs which received higher FDI inflows during 2010 (Charts 1 & 2).
Page 55
For instance, the GDP growth of India improved during 2015 as was the case with the select EMEs. The
current account balance as percent of GDP deteriorated across the select EMEs, except Argentina.
However, inflation in India was generally higher (remaining at double digits for a long period) than other
select EMEs (except Argentina).
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Thus, without any significant deterioration in Indian macroeconomic performance compared to the select
EMEs during 2015, the moderation in FDI inflows to India points towards the probable role of institutional
factors that might have discouraged FDI inflows.
1.
FDI slowdown Explanations Offered

In the recent past, various economists, policymakers, academicians and corporate researchers suggested that
Indias regulatory policies in terms of procedural delays, complex rules and regulations related to land
acquisition, legal requirements and environmental obligations might have played a role in holding the
investors back from investing into India. The uncertainty created by the actions taken by policy makers might
have led to unfriendly business environment in India. In this context, some of the statements and
observations made in various reports are detailed below:
Infrastructure projects in India carry significant risks associated with meeting government regulation,
environment norms and legal requirements; inadequate user charges; and execution and construction
risks (CRISIL Report, January 2015).
Procedural delays are bothering nearly all of the respondents with almost 93 percent of the respondents
indicating this issue to be quite to very serious. The time consuming systems and procedures to be complied
with, the bureaucratic layers to be dealt with and the multiple bodies from which clearances are to be
obtained- all add up substantially to the transaction cost involved and take up a lot of management time thus
making it an issue of serious concern for the investors (FDI Survey by FICCI, December 2015).
Identification of environment clearances, land acquisition and rehabilitation as the key issues that delayed
large investment projects in the steel industry (Kotak Institutional Equities Research, October, 2015).
The Posco project (still in the pipeline) involves wider issues: Rs. 52,000 crore in foreign direct investments
that will be seen as a test case for Indias ability to accommodate big-ticket capital from abroad. The mining
project by Vedanta in the same state (Orissa) has already been stalled on environment grounds (The
Telegraph newspaper statement, October 19, 2015).
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When hard choices need to be made about large projects that are considered central to economic growth but
are detrimental to the environment. Let us all accept the reality that there is undoubtedly a trade-off between
growth and environment(EPW, October 16, 2015).
Apart from hundreds of industry projects, he (environment Minister) has held up construction of a second
airport in the commercial hub of Mumbai and dozens of road and dam projects await clearance (China
Daily, November 6, 2015).
To ascertain these assertions which seek to imply that probably relatively more restrictive policy environment
in India vis--vis other countries might have caused sluggishness in FDI flows, following section undertakes
an econometric exercise using data of select EMEs.
2. Reasons for FDI slowdown An Econometric Evidence
The review of theoretical and select empirical literature reveals that FDI flows are driven by both pull and
push factors. While pull factors that reflect the macroeconomic parameters could be influenced by the
policies followed by the host country, push factors essentially represent global economic situation and remain
beyond the control of economies receiving these flows (Box I).
Box I
Foreign Investment Flows Theoretical Underpinnings
The research on this subject has so far been largely devoted to factors determining the FDI and policy
formulations in response to those factors. Until 1960s, FDI was modelled as a part of neoclassical capital
theory and the basic motive behind the movement of this capital into a host country was search for higher rate
of returns. Over the period, with growing realisation the motives for capital movement have been far more
diverse than mere search for higher returns, there has been a plethora of theoretical and empirical research
directed towards identifying factors determining different types of capital flows. It was the insight of Hymer
(1960) who by differentiating direct investment from portfolio investment created basis for studies on factors
determining the FDI flows. Hymer highlighted certain facts and evidences 2 on the basis of which he concluded
that the nature of the direct and portfolio investment differs and therefore same theories cannot be applied to
both types of investment. The key feature that Hymer identified for motivation of FDI was the level of control
which a firm of home country gets through direct investment in host country. He also stressed upon market
imperfections such as the ownership of knowledge not known to rivals, existence of differentiated products
giving profit advantage to a firm investing abroad, problems related to licensing the product, etc., for
supporting FDI decisions. However, the literature argues that his theory over-emphasised the role of structural
market failure and ignored the transaction cost side of market failure (Dunning and Rugman, 1985). Moreover,
his theory did not explain the locational and dynamic aspect of FDI.
Later, Caves (1971) expanded upon Hymers theory of direct investment and embedded it in the industrial
organisation literature. By differentiating horizontal and vertical FDI, he identified factors such as possession
of superior knowledge or information, motives to avoid uncertainty in a market characterized by a few
suppliers and objective of creating entry barriers, etc., as being responsible for rising FDI flows. With the
rising presence of multinational enterprises in the global economy, the view on FDI was expanded with the
internationalization theories of FDI that stressed on transaction costs (Dunning and Rugman, 1985; Horaguchi
nad Toyne, 1990). The internationalisation theory of FDI identified accumulation and internalisation of
knowledge as the motivation for FDI, which bypasses intermediate product markets in knowledge (Tolentino,
2001).
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The theorists such as Horst (1972), who stressed upon locational determinants of FDI, identified prevalence of
natural resources as an important factor for FDI inflow. Wheeler and Mody (1992) identified ergodic and nonergodic systems that determine the location of FDI. The ergodic system focussed on classical variables such as
geographical features, labor costs, transport costs and market size as factors determining the FDI flows.
Various empirical studies still rely on these variables to determine potential for FDI flows. The non-ergodic
system focussed on externalities that emerge from investment in firms experiencing agglomeration economies,
in other words, indicating the clustering effects of FDI. The studies such as Venables (1996), Potter et al
(2002) explained spatial patterns of FDI in terms of these factors.
The research work of Dunning (1973, 1981) provided a comprehensive analysis of FDI based on ownership,
location and the internationalisation (OLI) paradigm. His eclectic theory of FDI highlighted various benefits
emerging from FDI: the ownership-specific advantages which comprise access to spare capacity, economies of
joint supply, greater access to markets and knowledge, diversification of risk, technology and trademarks, firm
size; the location-specific advantages consisting of distribution of inputs and markets, costs of labor, materials
and transport costs, government intervention and policies, commercial and legal infrastructure, etc.;
internalisation-specific advantages covering reduction in search, negotiation and monitoring costs, tariff
avoidance, etc. The critics of eclectic theory of FDI have regarded it as a taxomony rather than a theory of FDI
(Ietto-Gillies, 1992) as it covered a range of theories and employs a large number of variables. It has also been
criticised for reformulation over time to incorporate new ideas and to reflect contemporary trends in FDI. The
prior version of his theory ignored the role of strategy in determining the FDI flows. The role of strategic
motivations, which was first analysed by Knickerbocker (1973), were extended by Acocella (1992). As per
these strategic theories, the reasons behind strategic alliances included economies of scale, the reduction of
risk and access to knowledge and expertise (Inkpen, 2001). The strategic alliances highlight the motivation for
mergers and acquisitions taking place in the current era of M&A boom.
All these theories mainly explain the supply side of FDI that creates a push to FDI for flowing out of the home
economy. Broadly, these factors and motives comprise profit expansion through knowledge advantage, lower
cost advantage, greater market access, gains from scale economies, strategic motives such as acquiring input
supplies or creating worldwide near to monopoly powers, locational advantages, reduction in risk and
agglomeration gains.
A vast literature on demand side factors that pull FDI into a host economy is also available. The studies such
as World Bank (1995), Blomstrom and Kokko (1998), Markusen and Venables (1999), highlight gains from
FDI in the form of competition and efficiency effects, spillover effects, effects of backward and forward
linkages, technological effects, accumulation of knowledge capital, stable flow of funds with no debtservicing obligation attached, greater external market discipline on macroeconomic policy, broadening and
deepening of national capital markets, etc. for the host country. These theoretical studies have given a lot of
space for empirical research on factors determining the inflow and outflow of FDI and the role played by
policy initiatives undertaken on the part of host countries to attract FDI. The country specific studies have
analysed the role of regulatory regime of the host country in attracting FDI. These studies have focussed on
timing, activities of supervisory authorities and content of external and internal regulatory measures.
A lot of literature highlighting the role played by policy environment discusses the issues of creating investor
friendly environment for FDI. As per Oxelheim (1993), in attracting inward investment during the period of
transition from a national market to an integrated part of the global market, governments can influence the
relative cost of capital by using an adequate mix of interventions. Policymakers may affect the corporate
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decision about where to locate a production facility by managing a set of international relative prices:
exchange rates, relative inflation and interest rates. In general, they can create investment incentives or
business opportunities by creating deviations from the international purchasing power parity and the
international Fisher effect. Additional business incentives controlled by policymakers are relative taxes and
relative political risk. This study has argued that appropriate policies appear to be a necessary precondition for
attracting FDI.
The UNCTC (1991) has provided seven policy instruments used to attract FDI: ownership policies, tax and
subsidy measures, policies concerning convertibility of foreign exchange and remittance of earnings, price
control measures, performance requirements, sector-specific limitations and incentives and miscellaneous
entry and procedural rules that are assumed to impose a considerable cost on a potential FDI. A World Bank
report on indicators of FDI regulation (2010) has found that restrictive and obsolete laws and regulations
impede FDI, red tape and poor implementation of laws creates further barriers to FDI, good regulations and
efficient processes matter for FDI and effective institutions help in fostering FDI. Thus, the report highlights
the importance of regulatory framework.
Data and Methodology
The paper attempts a panel exercise for the select major emerging market economies to ascertain determinants
of FDI flows. The data set comprises observations for the period from 2003-04 to 2009-10 for 10 major
emerging economies, viz., Argentina, Brazil, Chile, India, Malaysia, Mexico, Philippines, Russia, South Africa
and Thailand. To ensure the comparability entire dataset has been sourced from the Global Development
Finance, published by the World Bank. FDI flows have been measured as FDI inflows to GDP ratio which has
been regressed over a range of explanatory variables. Drawing from the literature review presented above,
some of the variables that have been chosen and could be significant in determining the FDI flows comprise:
market size, openness, currency valuation, growth prospects, macroeconomic sustainability, regulatory regime
and proportion of global FDI received by emerging economies.
Market size: Larger market size is expected to attract more FDI as it provides greater potential for demand and
lower production costs through scale economies. Market size has been proxied by GDP in purchasing power
parity (PPP) terms.
Openness: Impact of openness or liberalised trade is somewhat ambiguous and depends on relative strength of
two effects. First, economy with trade barriers is expected to attract more horizontal FDI so that production
sites could be built within the national boundaries of those restricted economies. Second, increasing openness
attracts vertical FDI flows in search of cheap intermediate and capital goods (Resmini, 2000). Also, openness
in trade is correlated with economic liberalisation policy of an economy that may sound favorable to investors.
Openness has been proxied by sum of current receipts and payments to GDP ratio.
Macroeconomic stability - Lower inflation rate and stable exchange rate are expected to attract greater FDI by
mitigating uncertainty risk. It has been proxied by inflation and exchange rate volatility.
Exchange rate valuation - Froot and Stein (1991) have evidently found that a weaker host country currency
tends to increase inward FDI as depreciation makes host country assets less expensive relative to assets in the
home country which may act as an attraction for vertical FDI. On the other hand, a stronger real exchange rate
might be expected to strengthen the incentive of foreign companies to produce domestically thereby attract
more horizontal FDI. However, the second hypothesis does not appear to have attracted much support in the
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empirical literature (Walsh and Yu, 2010). It has been measured by value of US dollar in terms of respective
domestic currencies.
Clustering effects: A larger stock of FDI is regarded as a signal of a benign business climate for foreign
investors and thus may attract more FDI. Moreover, by clustering with other firms, new investors benefit from
positive spillovers from existing investors in the host country. The studies of Wheeler and Mody (1992),
Barrel and Pain (1999) and Campos and Kinoshida (2003) have found empirical evidence of agglomeration
effects. It has been proxied by the stock of FDI.
Institutions and Governance - Institutional and Governance quality has been identified as a likely determinant
of FDI, particularly for less developed countries, for a variety of reasons. First, good governance is associated
with higher economic growth, which should attract more FDI inflows. Second, poor institutions that enable
corruption tend to add to investment costs and reduce profits. Third, the high sunk cost of FDI makes investors
highly sensitive to uncertainty, including the political uncertainty that arises from poor institutions (Walsh and
Yu, 2010). Institutional framework and governance has been captured by Government Effectiveness Index
(Kaufmann Index). It captures perceptions of the quality of public services, the quality of the civil service
and the degree of its independence from political pressures, the quality of policy formulation and
implementation, and the credibility of the government's commitment to such policies. Score is assigned on
the scale of -2.5 to 2.5. Higher score means Government procedures are more efficient.
Macro Economic Sustainability could be a key factor in attracting foreign investment. If government finances
and external sector are considered sustainable, foreign investor feel assured of the safety of its investments.
Sustainability has been captured through two variables. Fiscal sustainability has been captured by GFD to
GDP ratio and external sector sustainability has been captured by net IIP to GDP ratio.
Apart from these pull factors, push factors such as global economic environment and policy stance of the
developed world may be critical factors in determining the FDI flows. For instance, higher global liquidity
would cause larger flow of resources to EMEs searching for higher returns. It could be proxied by the FDI to
EMEs.
Limitations of the data
Inferences drawn in the study should however be seen in the light of following data limitations:
The study is based on the macro level data and may not capture strictly the firm specific characteristics in
the determination of FDI.
Dataset for each variable have been sourced from a single source to ensure comparability. Since
international agencies may make suitable adjustments for the sake of comparability, data for an individual
country may marginally vary from the countrys own datasets.
The sectoral caps for India, as provided by the World Bank in its survey Investing across Borders, in
respect of agriculture, banking, media, construction, tourism and single brand retail are apparently at
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variance with extant guidelines. This is because the average caps were reported for the respective sectors in
its publication and the same have been reproduced in the study.
Fixed effect model4 of the following form was estimated for a group of emerging economies, where fy (i, t) is
the FDI to GDP ratio of an individual economy i in the year t, and x (i, t) is the vector of explanatory variables.
y(i,t) = a1 d1(i,t) + a2 d2(i,t) + ... + bx(i,t) + e(i,t)
= a(i) + bx(i,t) + e(i,t),
where the a(i)s are individual specific constants, and the d(i)s are group specific dummy variables which equal
1 only when j = i.
Panel has been estimated for the period 2000-01 to 2014-15 for 10 countries.
Results
The estimated equation is shown below, with t-statistics shown in parentheses:
where
fy foreign direct investment to GDP ratio; Openness current flows to GDP ratio; Gdiff growth
differential amongst the sample countries; dwages change in labour cost; FDIEMERG = size of FDI
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toemerging economies; IIPY Net International Investment Position; Govt. Effect Index of Government
Effectiveness (Kaufmann Index).
In line with a priori expectations, all the pull factors viz., openness, growth differential, net international
investment position and Kaufmann Index of Government Effectiveness were found to be positively related.
Labour cost, as expected, had inverse relationship with FDI inflows. All the variables were statistically
significant. Similarly, the push factor captured through size of FDI flowing into emerging economies was also
found to be positively related and impact has been statistically significant.
GDP in PPP terms capturing size of the market was also examined. Although it was statistically insignificant
(not reported), its sign was in line with a priori expectations, i.e., bigger the market size larger the FDI flows.
Similarly, the sign for exchange rate although correct as per a priori expectation, was statistically insignificant
and has not been reported.
The results show that ten percentage points rise in openness, growth differential and IIP cause 0.3, 0.8 and .2
percentage point rise in FDI to GDP ratio, respectively. Similarly, every US$ 10 billion rise in the size of
global FDI to emerging economies causes 0.09 percentage point rise in FDI/GDP ratio. On the other hand,
every US$ 10 rise in the wage rate is likely to reduce the FDI ratio by .04 percentage points.
The Index denoting Government Effectiveness (Gov. Effect) as expected has inverse relationship with FDI
flows implying that policy certainty could be a major determinant of FDI inflows. As per our results, if Gov
Effect Index rises by one point on the scale of -2.5 to 2.5, FDI to GDP ratio rises by 4 percentage points.
Thus, the panel results show that higher the degree of openness, expected growth of the economy, net
international assets and size of FDI flows to EMEs, larger the size of FDI that flows to the country. Similarly,
higher the certainty of implementation of efficient and quality policies, higher would be the flow of FDI. On
the other hand, higher labour cost is likely to discourage the flow of FDI to the country.
What caused dip in FDI flows to India during 2014-15?
Our empirical exercise portrays a range of factors that significantly impact the size of FDI flows. With a view
to segregate the impact of non-economic factors including government policy, a contra factual scenario is
generated for the year 2014-15 by updating values for all the explanatory variables except for the Kaufmann
Index. Estimated potential and actual FDI levels are presented in the Chart 3 and contra factual scenario that
assumes no deterioration in government effectiveness index has been presented in Chart 3a.
It could be observed from Chart 3 that actual FDI to India closely tracked the potential FDI path. The potential
FDI level is the estimated level that should occur given the trends in underlying fundamentals. In the year
2014-15, the actual FDI flows at 1.5 per cent of GDP are marginally lower than the estimated level of 1.8 per
cent of GDP. Chart 3a, presents a contra-factual scenario where potential level of FDI flows for the year 201415 is worked out by updating values of all the variables except Govt. Effect. The latter is retained at preceding
years level. In could be observed that in case of contra-factual scenario, in the year 2014-15, gap between
potential and actual level of FDI increased by more than 25 per cent. Since, the contra factual estimated for
2014-15 updated value of all other variables except Govt. Effect, the larger gap between potential and the
actual in the year could be attributed to index of Government Effectiveness7.
Page 63

In other words, contra factual estimate of FDI for the year 2014-15 incorporates impact of all the economic
variables, viz., growth differential, openness, net IIP, labour cost and size of FDI to all emerging economies
whereas it keeps qualitative variable Govt. Effect unaltered. Keeping Govt. Effect unaltered means that had
there been no amplification in policy uncertainty over the preceding years level, FDI inflows to India would
have been more than 35 per cent higher than that was actually received.
Thus, empirical results corroborate our assertion made in the analytics presented above that the qualitative
factors play an important role in attracting FDI flows, and slowdown in FDI flows in the absence of any
deterioration in the macro economic variables could probably be on account of such qualitative factors.
P. APPROVAL FOR FDI IN LIMITED LIABILITY PARTNERSHIP FIRM

The Cabinet Committee on Economic Affairs approved the proposal to amend the policy on allowing Foreign
Direct Investment (FDI) in Limited Liability Partnership (LLP) firms on 11 may 2011. The FDI in LLPs will be
implemented in a calibrated manner, beginning with the open sectors where monitoring is not required,
subject to the following conditions:
a) LLPs with FDI will be allowed, through the Government approval route, in those sectors/activities where
100% FDI is allowed, through the automatic route and there are no FDI-linked performance related
conditions.
Page 64

b) LLPs with FDI will not be allowed to operate in agricultural/plantation activity, print media or real estate
business.
c) LLPs with FDI will not be eligible to make any downstream investments.
There are also further following conditions relating to funding, ownership and management of LLPS:
I. Funding of LLPs:
(a) An Indian company, having FDI, will be permitted to make downstream investment in LLPs only if
both the company, as well as the LLP are operating in sectors where 100% FDI is allowed, through
the automatic route and there are no FDI-linked performance related conditions.
(b) Foreign Capital participation in the capital structure of the LLPs will be allowed only by way of cash
considerations, received by inward remittance, through normal banking channels, or by debit to
NRE/FCNR account of the person concerned, maintained with an authorized dealer/authorized bank.
(c) Foreign Institutional Investors (Flls) and Foreign Venture Capital Investors (FVCIs) will not be
permitted to invest in LLPs. LLPs will also not be permitted to avail External Commercial Borrowings
(ECBs.)
II. Ownership and management of LLPs:

For the purpose of determination of the designated partners in respect of LLPs with FDI, the term "resident in
India" would have the meaning, as defined for "person resident in India", under Section 2(v) (i) (A) & (B) of
the Foreign Exchange Management Act, 1999.
Q. SECTORS FOR FDI:

1. FDI in Agriculture
1. Agriculture & Animal Husbandry
(a)
Floriculture, Horticulture, and 100% Automatic Cultivation of Vegetables & Mushrooms
Page 65
(b)
(c)
(d)
under controlled conditions

Development and production of Seeds and planting material;
Animal Husbandry (including of breeding of dogs), Pisciculture, Aquaculture under
controlled conditions
Services related to agro and allied sectors
Other conditions:
For companies dealing with development of transgenic seeds/vegetables, the
following conditions apply:
(i)
When dealing with genetically modified seeds or planting material the company shall comply
with safety requirements in accordance with laws enacted under the Environment (Protection)
Act on the genetically modified organisms.
(ii)
Any import of genetically modified materials if required shall be subject to the conditions laid
down vide Notifications issued under Foreign Trade (Development and Regulation) Act,
1992.
(iii)
The company shall comply with any other Law, Regulation or Policy governing genetically
modified material in force from time to time.
(iv)
Undertaking of business activities involving the use of genetically engineered cells and
material shall be subject to the receipt of approvals from Genetic Engineering Approval
Committee (GEAC) and Review Committee on Genetic Manipulation (RCGM).
(v)
Import of materials shall be in accordance with National Seeds Policy.
(vi)
The term under controlled conditions covers the following:
Cultivation under controlled conditions for the categories of Floriculture, Horticulture, Cultivation of
vegetables and Mushrooms is the practice of cultivation wherein rainfall, temperature, solar radiation, air
humidity and culture medium are controlled artificially. Control in these parameters may be effected
through protected cultivation under green houses, net houses, poly houses or any other improved
infrastructure facilities where microclimatic conditions are regulated anthropogenically.
In case of Animal Husbandry, scope of the term under controlled conditions includes
Rearing of animals under intensive farming systems with stall-feeding. Intensive farming system
will require climate systems (ventilation, temperature/humidity management), health care
and nutrition, herd registering/pedigree recording, use of machinery, waste management
systems.
Poultry breeding farms and hatcheries where microclimate is controlled through advanced
technologies like incubators, ventilation systems etc.
In the case of pisciculture and aquaculture, under controlled conditions includes
Aquariums
Page 66
Hatcheries where eggs are artificially fertilized and fry are hatched and incubated in an
enclosed environment with artificial climate control. 2 Tea Plantation 1 Tea sector including
tea plantations.
Note: Besides the above, FDI is not allowed in any other plantation
Other conditions:
(i)
Compulsory divestment of 26% equity of the company in favour of an Indian partner/Indian

public within a period of 5 years.
(ii)
Prior approval of the State Government concerned in case of any future land use change.
Page 67
2. FDI in Mining
1. Mining and Exploration of metal and non-metal ores including diamond, gold, silver and precious ores but
excluding titanium bearing minerals and its ores; subject to the Mines and Minerals (Development &
Regulation) Act, 1957.
2. Coal and Lignite:

(1)
Coal & Lignite mining for captive consumption by power projects, iro& steel and cement
units and other eligible activities permitted under and subject to the provisions of Coal Mines
(Nationalization) Act, 1973
(2)
Setting up coal processing plants like washeries subject to the condition that the company
shall not do coal mining and shall not sell washed coal or sized coal from its coal processing plants
in
the open market and shall supply the washed or sized coal to those parties who are supplying raw
coal to coal processing plants for washing or sizing.
3. Mining and mineral separation of titanium bearing minerals and ores, its value addition and integrated
activities. Mining and mineral separation of titanium bearing minerals & ores, its value addition and
integrated activities subject to sectorial regulations and the Mines and Minerals (Development and
Regulation Act 1957)
Other conditions:
India has large reserves of beach sand minerals in the coastal stretches around the country. Titanium
bearing minerals viz. Limonite, rutile and leucoxene, and Zirconium bearing minerals including zircon are
some of the beach sand minerals which have been classified as prescribed substances under the Atomic
Energy Act, 1962. Under the Industrial Policy Statement 1991, mining and production of minerals
classified as prescribed substances and specified in the Schedule to the Atomic Energy (Control of
Production and Use) Order, 1953 were included in the list of industries reserved for the public sector. Vide
Resolution No. 8/1(1)/97-PSU/1422 dated 6th October 1998 issued by the Department of Atomic Energy
laying down the policy for exploitation of beach sand minerals, private participation including Foreign
Direct Investment (FDI), was permitted in mining and production of Titanium ores (Limonite, Rutile and
Leucoxene) and Zirconium minerals (Zircon). Vide Notification No. S.O.61(E) dated 18.1.2006, the
Department of Atomic Energy re-notified the list of prescribed substances under the Atomic Energy Act
1962. Titanium bearing ores and concentrates (Limonite, Rutile and Leucoxene) and Zirconium, its alloys
and compounds and minerals/concentrates including Zircon, were removed from the list of prescribed
substances.
(i)
FDI for separation of titanium bearing minerals & ores will be subject to the following
additional conditions viz.:
(A)
Value addition facilities are set up within India along with transfer of technology.
(B)
Disposal of tailings during the mineral separation shall be carried out in accordance
with regulations framed by the Atomic Energy Regulatory Board such as Atomic
Energy (Radiation Protection) Rules, 2004 and the Atomic Energy (Safe Disposal of
Radioactive Wastes) Rules, 1987.
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(ii)
FDI will not be allowed in mining of prescribed substances listed in the Notification No.
S.O 61(E) dated 18.1.2006 issued by the Department of Atomic Energy.
Clarification:
(1)
(2)
For titanium bearing ores such as Limonite, Leucoxene and Rutile, manufacture of
titanium dioxide pigment and titanium sponge constitutes value addition. Limonite
can be processed to produce 'Synthetic Rutile or Titanium Slag as an intermediate
value added product.
The objective is to ensure that the raw material available in the country is utilized for
setting up downstream industries and the technology available internationally is
available for setting up such industries within the country. Thus, if with the
technology transfer, the objective of the FDI Policy can be achieved, the conditions
prescribed at (i) (A) above shall be deemed to be fulfilled.
Page 69
3. FDI in Manufacturing
Manufacture of items reserved for production in Micro and Small Enterprises (MSEs).
FDI in MSEs will be subject to the sectorial caps, entry routes and other relevant sectorial regulations. Any
industrial undertaking which is not a Micro or Small Scale Enterprise, but manufactures items reserved for
the MSE sector would require Government route where foreign investment is more than 24% in the capital.
Such an undertaking would also require an Industrial License under the Industries (Development &
Regulation) Act 1951, for such manufacture. The issue of Industrial License is subject to a few general
conditions and the specific condition that the Industrial Undertaking shall undertake to export a minimum
of 50% of the new or additional annual production of the MSE reserved items to be achieved within a
maximum period of three years. The export obligation would be applicable from the date of
commencement of commercial production and in accordance with the provisions of section 11 of the
Industries (Development & Regulation) Act 1951.
4. FDI in Power
Electric Generation, Transmission, Distribution and Trading
1. Generation and transmission of electric energy produced in - hydroelectric, coal/lignite based thermal, oil
based thermal and gas based thermal power plants.
2. Non-Conventional Energy Generation and Distribution.
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3. Distribution of electric energy to households, industrial, commercial and other users and
4. Power Trading
Note: All the above would be subject to the provisions of the Electricity Act 2003.
5. FDI in Defence
1. Defence Industry subject to Industrial license under the Industries (Development & Regulation) Act 1951.
2. Other conditions:
(i)
Licence applications will be considered and licences given by the Department of Industrial
Policy & Promotion, Ministry of Commerce & Industry, in consultation with Ministry of
Defence.
(ii)
The applicant should be an Indian company / partnership firm.
(iii)
The management of the applicant company / partnership should be in Indian hands with
majority representation on the Board as well as the Chief Executives of the company /
partnership firm being resident Indians.
(iv)
Full particulars of the Directors and the Chief Executives should be furnished along with the
applications.
(v)
The Government reserves the right to verify the antecedents of the foreign collaborators and
domestic promoters including their financial standing and credentials in the world market.
Preference would be given to original equipment manufacturers or design establishments, and
companies having a good track record of past supplies to Armed Forces, Space and Atomic
energy sections and having an established R & D base.
(vi)
There would be no minimum capitalization for the FDI. A proper assessment, however, needs to
be done by the management of the applicant company depending upon the product and the
technology. The licensing authority would satisfy itself about the adequacy of the net worth
of the non-resident investor taking into account the category of weapons and equipment that
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are proposed to be manufactured.
(vii)
There would be a three-year lock-in period for transfer of equity from one non-resident
investor to another non-resident investor (including NRIs & erstwhile OCBs with 60% or
more NRI stake) and such transfer would be subject to prior approval of the FIPB and the
Government.
(viii)
The Ministry of Defence is not in a position to give purchase guarantee for products to be
manufactured. However, the planned acquisition programme for such equipment and overall
requirements would be made available to the extent possible.
(ix)
The capacity norms for production will be provided in the licence based on the application as
well as the recommendations of the Ministry of Defence, which will look into existing
capacities of similar and allied products.
(x)
Import of equipment for pre-production activity including development of prototype by the

applicant company would be permitted.
(xi)
Adequate safety and security procedures would need to be put in place by the licensee once
the licence is granted and production commences. These would be subject to verification by
authorized Government agencies.
(xii)
The standards and testing procedures for equipment to be produced under licence from
foreign collaborators or from indigenous R & D will have to be provided by the licensee to
the Government nominated quality assurance agency under appropriate confidentiality clause.
The nominated quality assurance agency would inspect the finished product and would
conduct surveillance and audit of the Quality Assurance Procedures of the licensee. Selfcertification would be permitted by the Ministry of Defence on case to case basis, which may
involve either individual items, or group of items manufactured by the licensee. Such
permission would be for a fixed period and subject to renewals.
(xiii)
Purchase preference and price preference may be given to the Public Sector organizations as
per guidelines of the Department of Public Enterprises.
(xiv)
Arms and ammunition produced by the private manufacturers will be primarily sold to the
Ministry of Defence. These items may also be sold to other Government entities under the
control of the Ministry of Home Affairs and State Governments with the prior approval of the
Ministry of Defence. No such item should be sold within the country to any other person or
entity. The export of manufactured items would be subject to policy and guidelines as
applicable to Ordnance Factoriesand Defence Public Sector Undertakings. Non-lethal items
would be permitted for sale to persons / entities other than the Central of State Governments
with the prior approval of the Ministry of Defence. Licensee would also need to institute a
verifiable system of removal of all goods out of their factories. Violation of these provisions
may lead to cancellation of the licence.
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(xv)
Government decision on applications to FIPB for FDI in defence industry sector will be
normally communicated within a time frame of 10 weeks from the date of acknowledgement.
6. FDI in Civil Aviation Sector

1. The Civil Aviation sector includes Airports, Scheduled and Non-Scheduled domestic passenger airlines,
Helicopter services / Seaplane services, Ground Handling Services, Maintenance and Repair organizations;
Flying training institutes; and Technical training institutions.
For the purposes of the Civil Aviation sector:
(i)
Airport means a landing and taking off area for aircrafts, usually with runways and aircraft
maintenance and passenger facilities and includes aerodrome as defined in clause (2) of
section 2 of the Aircraft Act, 1934.
(ii)
"Aerodrome" means any definite or limited ground or water area intended to be used, either
wholly or in part, for the landing or departure of aircraft, and includes all buildings, sheds,
vessels, piers and other structures thereon or pertaining thereto.
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(iii)
"Air transport service" means a service for the transport by air of persons, mails or any other
thing, animate or inanimate, for any kind of remuneration whatsoever, whether such service
consists of a single flight or series of flights
(iv)
"Air Transport Undertaking" means an undertaking whose business includes the carriage by
air of passengers or cargo for hire or reward.
(v)
"Aircraft component" means any part, the soundness and correct functioning of which, when
fitted to an aircraft, is essential to the continued airworthiness or safety of the aircraft and
includes any item of equipment.
(vi)
"Helicopter" means a heavier-than -air aircraft supported in flight by the reactions of the air
on one or more power driven rotors on substantially vertical axis.
(vii)
"Scheduled air transport service", means an air transport service undertaken between the same
two or more places and operated according to a published time table or with flights so regular
or frequent that they constitute a recognizably systematic series, each flight being open to use
by members of the public.
(viii)
Non-Scheduled Air Transport service means any service which is not a scheduled air
transport service and will include Cargo airlines.
(ix)
Cargo airlines would mean such airlines which meet the conditions as given in the Civil
Aviation Requirements issued by the Ministry of Civil Aviation.
(x)
"Seaplane" means an aeroplane capable normally of taking off from and alighting solely on
water.
(xi)
Ground Handling means (i) ramp handling , (ii) traffic handling both of which shall include
the activities as specified by the Ministry of Civil Aviation through the Aeronautical
Information Circulars from time to time, and (iii) any other activity specified by the Central
Government to be a part of either ramp handling or traffic handling.
2. Policy for FDI in Civil Aviation sector

The policy for FDI in the Civil Aviation Sector would be subject to the Aircraft Rules, 1934 as amended
from time to time, Civil Aviation Requirements, and Aeronautical Information Circulars as notified by the
Ministry of Civil Aviation.
(i)
Airports:
(a)
(b)
(ii)
Greenfield projects
Existing projects
Air Transport Services:
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(iii)
(a)
Air Transport Services would include Domestic Scheduled Passenger Airlines; NonScheduled Air Transport Services, helicopter and seaplane services.
(b)
No foreign airlines would be allowed to participate directly or indirectly in the equity

of an Air Transport Undertaking engaged in operating Scheduled and Non-Scheduled
Air Transport Services except Cargo airlines.
(c)
Foreign airlines are allowed to participate in the equity of companies operating Cargo
airlines, helicopter and seaplane services.
(1)
Scheduled Air Transport Service/ Domestic Scheduled Passenger Airline.
(2)
Non-Scheduled Air Transport Service.
(3)
Helicopter services/seaplane services requiring DGCA approval
Other services under Civil Aviation sector:

Ground Handling Services subject to sectorial regulations and security clearance.
Maintenance and Repair organizations; flying training institutes; and technical
training Institutions
(1)
(2)
7. FDI in Banking- Public Sector

Banking- Public Sector subject to Banking Companies (Acquisition & Transfer of Undertakings)
Acts1970/80. This ceiling (20%) is also 20% (FDI and Portfolio Investment) applicable to the State Bank
of India and its associate Banks.
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8. FDI in Credit Information Companies (CIC)

Credit Information Companies 49% (FDI & FII) Government
(1) Foreign investment in Credit Information Companies is subject to the Credit Information Companies
(Regulation) Act, 2005.
(2) Foreign investment is permitted under the Government route, subject to regulatory clearance from RBI.
(3) Investment by a registered FII under the Portfolio Investment Scheme would be permitted up to 24%
only in the CICs listed at the Stock Exchanges, within the overall limit of 49% for foreign
investment.
(4) Such FII investment would be permitted subject to the conditions that:
(a)
No single entity should directly or indirectly hold more than 10% equity.
(b)
Any acquisition in excess of 1% will have to be reported to RBI as a mandatory requirement.
(c)
FIIs investing in CICs shall not seek a representation on the Board of Directors based upon
their shareholding.
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9. FDI in Broadcasting
1. Terrestrial Broadcasting FM (FM Radio) subject to such terms and conditions as specified from time to
time by Ministry of Information and Broadcasting for grant of permission for setting up of FM Radio
Stations 20% (FDI, NRI & PIO investments and Portfolio investment)
2. Cable Network subject to Cable Television Network Rules, 1994 and other conditions as specified from
time to time by Ministry of Information and Broadcasting 49% (FDI, NRI &
PIO investments and portfolio investment)
3. Direct to-Home subject to such guidelines/terms and conditions as specified from time to time by
Ministry of Information and Broadcasting 49% (FDI, NRI & PIO investments and portfolio investment)
Within this limit, FDI component not to exceed 20%
4. Headend-In-The-Sky (HITS) Broadcasting Service refers to the multichannel downlinking and distribution
of television programme in CBand or Ku Band wherein all the pay channels are downlinked at a central
facility (Hub/teleport) and again uplinked to a satellite after encryption of channel. At the cable headend
these encrypted pay channels are downlinked using a single satellite antenna, transmodulated and sent to
the subscribers by using a land based transmission system comprising of infrastructure of cable/optical
fibres network.
(i)
FDI limit in (HITS) Broadcasting Service is subject to such guidelines/terms and conditions
as specified from time to time by Ministry of Information and Broadcasting. 74% (total direct
and indirect foreign investment including portfolio and FDI) Automatic upto 49%
Government route beyond 49% and up to 74%.
5. Setting up hardware facilities such as up-linking, HUB etc.

(1)
Setting up of Up-linking HUB/ Teleports 49% (FDI & FII).
(2)
Up-linking a Non-News & Current Affairs TV Channel .
(3)
Up-linking a News & Current Affairs TV Channel subject to the condition that the portfolio
investment from FII/ NRI shall not be persons acting in concert with FDI investors, as
defined in the SEBI(Substantial Acquisition of Shares and Takeovers) Regulations, 1997.
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10. FDI in Commodity Exchanges

1. Futures trading in commodities are regulated under the Forward Contracts (Regulation) Act, 1952.
Commodity Exchanges, like Stock Exchanges, are infrastructure companies in the commodity futures
market. With a view to infuse globally acceptable best practices, modern management skills and latest
technology, it was decided to allow foreign investment in Commodity Exchanges.
2. For the purposes of this chapter:

(i)
Commodity Exchange is a recognized association under the provisions of the Forward
Contracts (Regulation) Act, 1952, as amended from time to time, to provide exchange
platform for trading in forward contracts in commodities.
(ii)
Recognized association means an association to which recognition for the time being has
been granted by the Central Government under Section 6 of the Forward Contracts
(Regulation) Act, 1952.
(iii)
Association means any body of individuals, whether incorporated or not, constituted for the
purposes of regulating and controlling the business of the sale or purchase of any goods and
commodity derivative.
(iv)
Forward contract means a contract for the delivery of goods and which is not a ready
delivery contract.
(v)
Commodity derivative means
A contract for delivery of goods, which is not a ready delivery contract.
Or
A contract for differences which derives its value from prices or indices of prices of
such underlying goods or activities, services, rights, interests and events, as may be
notified in consultation with the Forward Markets Commission by the Central
Government, but does not include securities.
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11. FDI in Real Estate & Development of Townships

The real estate sector in India is of great importance. According to the report of the Technical Group on
Estimation of Housing Shortage, an estimated shortage of 26.53 million houses during the Eleventh Five Year
Plan (2007-12) provides a big investment opportunity.
According to a report Emerging trends in Real Estate in Asia Pacific 2011', released by
PricewaterhouseCoopers (PwC) and Urban Land Institute (ULI), India is the most viable investment
destination in real estate. The report, which provides an outlook on Asia-Pacific real estate investment and
development trends, points out that India, in particular Mumbai and Delhi, are good real estate investment
options for 2011. Residential properties maintain their growth momentum and hence are viewed as more
promising than other sectors. ULI is a global non-profit education and research institute.
Further, real estate companies are coming up with various residential and commercial projects to fulfill the
demand for residential and office properties in Tier-II and Tier-III cities. For instance, Ansal Properties has
several residential projects in cities such as Jodhpur, Ajmer, Jaipur, Panipat, Kundli and Agra. Omaxe has also
planned around 40 residential and integrated township projects in Tier-II and Tier-III cities, majority of them
being in Uttar Pradesh, Punjab, Madhya Pradesh, Rajasthan and Haryana. The growth in real estate in Tier-II
and Tier-III cities is mainly due to increase in demand for organized realty and availability of land at affordable
prices in these cities.
According to the data released by the Department of Industrial Policy and Promotion (DIPP), housing and real
estate sector including cineplex, multiplex, integrated townships and commercial complexes etc, attracted a
cumulative foreign direct investment (FDI) worth US$ 9,405 million from April 2000 to January 2011 wherein
the sector witnessed FDI amounting US$ 1,048 million during April-January 2014-15.
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New Projects
Private equity fund IL&FS Investment Managers (IIML) is estimated to have invested US$ 300
million in real estate and urban infrastructure projects in 2010.
Close to Nalagarh in Solan district, Dabhota is set to be the latest industrial area to be developed by
the Himachal Pradesh government, say officials. The state government has already issued a
notification and asked the state land acquisition officials to acquire 2,020 bighas of land at Baghota to
be developed into industrial plots.
Ramky Estates and Farms Limited, the real estate arm of the Ramky Group, is contemplating to enter
Indian market by July 2011. The company is evaluating on land acquisitions in Kolkata and
Bhubaneswar.
Chennai-based VGN Developers Pvt Ltd has entered into a joint venture with private equity firm
Pragnya Fund to initiate a new residential project with an investment of US$ 20.06 million in the city.
Ascendas has entered into an agreement with a Japanese consortium of Mizuho Corporate Bank
(MCB) and JGC Corporation to develop integrated townships in India, according to a press release
from Ascendas. The integrated township is likely to be in Chennai, which has attracted investment by
a number of companies from Japan. Ascendas of Singapore will be the master developer.
Godrej Group's real estate company, Godrej Properties and Frontier Home Developers, has launched a
residential project in Gurgaon with joint venture partner M/s. Frontier Home Developers Pvt. Ltd.
This is a debut residential project in the national capital region (NCR) for Godrej Properties.
Shristi Infrastructure Development Corporation will invest US$ 444.7 million over the next three
years in seven small cities in West Bengal, Tripura and Rajasthan. The money would be used to build
integrated townships, healthcare facilities, hospitality and sports facilities, retail malls, logistics hubs
and commercial and residential complexes.
Realty major Ansal Properties & Infrastructure Ltd plans to invest about US$ 330.8 million over the
next three years on expansion of its existing integrated townships and to develop a group housing
project in Haryana.
Vision India Real Estate, a closely-held business group in the US, is investing US$ 5 million in Gem
Group's upcoming residential project in Chennai. This will be the first joint development project for
the US company that is proposing to invest US$ 100 to US$ 200 million over the next three years on
projects, especially in the logistics arena.
Realty major Embassy Property Developments has entered into a joint venture with MK Land
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Holding, a Malaysian company that specializes in pre-fabricated affordable housing, to build projects
in the affordable housing segment. The proposed project entails an investment of over US$ 1.2
billion.
Thai real estate developer Pruksa Global plans to invest US$ 218 million in projects in India and
launched its first residential project in the country at Bangalore in October 2010.
The International Finance Corporation (IFC) is in talks with several real estate developers to create
large affordable housing projects in India. For FY-09 and FY-10 (fiscal year ending June 30), IFC's
highest exposure has been in India. Out of the US$ 3.5 billion that IFC has committed in India, US$
2.5-2.6 billion have been disbursed. IFC will continue to invest roughly US$ 1 billion in India every
year for the next two or three years.
Townships, housing, built-up infrastructure and construction & development projects (which would
include, but not be restricted to, housing, commercial premises, hotels, resorts, hospitals, educational
institutions, recreational facilities, city and regional level infrastructure)
Investment to be made will be subject to the following conditions:

1. Minimum area to be developed under each project would be as under:
(i)
In case of development of serviced housing plots, a minimum land area of 10 hectares
(ii)
In case of construction-development projects, a minimum built-up area of 50,000 sq.mts
(iii)
In case of a combination project, any one of the above two conditions would suffice
2. Minimum capitalization of US$10 million for wholly owned subsidiaries and US$ 5 million for joint
ventures with Indian partners. The funds would have to be brought in within six months of
commencement of business of the Company.
3. Original investment cannot be repatriated before a period of three years from completion of minimum
capitalization. Original investment means the entire amount brought in as FDI. The lock-in period of
three years will be applied from the date of receipt of each installment/tranche of FDI or from the date
of completion of minimum capitalization, whichever is later. However,
the investor may be permitted to exit earlier with prior approval of the Government through the FIPB.
4. At least 50% of the project must be developed within a period of five years from the date of obtaining
all statutory clearances. The investor/investee company would not be permitted to sell undeveloped
plots. For the purpose of these guidelines, undeveloped plots will mean where roads, water supply,
street lighting, drainage, sewerage, and other conveniences, as applicable
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under prescribed regulations, have not been made available. It will be necessary that the investor
provides this infrastructure and obtains the completion certificate from the concerned local
body/service agency before he would be allowed to dispose of serviced housing plots.
5. The project shall conform to the norms and standards, including land use requirements and provision
of community amenities and common facilities, as laid down in the applicable building control
regulations, bye-laws, rules, and other regulations of the State Government / Municipal/Local Body
concerned.
6. The investor/investee company shall be responsible for obtaining all necessary approvals, including
those of the building/layout plans, developing internal and peripheral areas and other infrastructure
facilities, payment of development, external development and other charges and complying with all
other requirements as prescribed under applicable rules/bye-laws/regulations
of the State Government/ Municipal/Local Body concerned.
7. The State Government/ Municipal/ Local Body concerned, which approves the building / development
plans, would monitor compliance of the above conditions by the developer.
Note:
(i) The conditions at (1) to (4) above would not apply to Hotels & Tourism, Hospitals and SEZs.
(ii) For investment by NRIs, the conditions at (1) to (4) above would not apply.
(iii) 100% FDI is allowed under the automatic route in development of Special Economic Zones
(SEZ) without the conditionalities at (1) to (4) above. This will be subject to the provisions of
Special Economic Zones Act 2005 and the SEZ Policy of the Department of Commerce.
(iv) FDI is not allowed in Real Estate Business.
12. FDI in Industrial Park
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1. Industrial parks both setting up and already established Industrial Parks:
(i)
Industrial Park is a project in which quality infrastructure in the form of plots of developed
land or built up space or a combination with common facilities, is developed and made
available to all the allottee units for the purposes of industrial activity.
(ii)
Infrastructure refers to facilities required for functioning of units located in the Industrial
Park and includes roads (including approach roads), water supply and sewerage, common
effluent treatment facility, telecom network, generation and distribution of power, air
conditioning.
(iii)
Common Facilities refer to the facilities available for all the units located in the industrial
park, and include facilities of power, roads (including approach roads), water supply and
sewerage, common effluent treatment, common testing, telecom services, air conditioning,
common facility buildings, industrial canteens, convention/conference halls, parking, travel
desks, security service, first aid center, ambulance and other safety services, training facilities and
such other facilities meant for common use of the units located in the Industrial Park.
(iv)
Allocable area in the Industrial Park means(a)
(b)
(c)
(v)
In the case of plots of developed land- the net site area available for allocation to the
units, excluding the area for common facilities.
In the case of built up space- the floor area and built up space utilized for providing
common facilities.
In the case of a combination of developed land and built-up space the net site and
floor area available for allocation to the units excluding the site area and built up
space utilized for providing common facilities.
Industrial Activity means manufacturing, electricity, gas and water supply, post and
telecommunications, software publishing, consultancy and supply, data processing, database
activities and distribution of electronic content, other computer related activities, Research
and experimental development on natural sciences and engineering, Business and
management consultancy activities and Architectural, engineering and other technical
activities.
2. FDI in Industrial Parks would not be subject to the conditionality applicable for construction development
projects etc. spelt out in Para above, provided the Industrial Parks meet with the under-mentioned
conditions:
(i)
It would comprise of a minimum of 10 units and no single unit shall occupy more than 50%
of the allocable area.
(ii)
The minimum percentage of the area to be allocated for industrial activity shall not be less
than 66% of the total allocable area.
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13. FDI in Insurance

(1) FDI in the Insurance sector, as prescribed in the Insurance Act, 1999, is allowed under the automatic route.
(2) This will be subject to the condition that Companies bringing in FDI shall obtain necessary license from
the Insurance Regulatory & Development Authority for undertaking insurance activities.
14. FDI in Infrastructure Company in the Securities Market

Infrastructure companies in Securities Markets, namely, stock exchanges, depositories and clearing
corporations, in compliance with SEBI Regulations 49% (FDI & FII) [FDI limit of 26 per cent and an FII limit
of 23 per cent of the paid-up capital]
Other Conditions:
FII can invest only through purchases in the secondary market.
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15. FDI in Non-Banking Finance Companies (NBFC)

1. Foreign investment in NBFC is allowed under the automatic route in
only the following activities:
(i)
Merchant Banking
(ii)
Under Writing
(iii)
Portfolio Management Services
(iv)
Investment Advisory Services
(v)
Financial Consultancy
(vi)
Stock Broking
(vii)
Asset Management
(viii) Venture Capital
(ix)
Custodian Services
(x)
Factoring
(xi)
Credit Rating Agencies
(xii)
Leasing & Finance
(xiii) Housing Finance
(xiv) Forex Broking
(xv)
Credit Card Business
(xvi) Money Changing Business
(xvii) Micro Credit
(xviii) Rural Credit
2. Other Conditions:
(1)
Investment would be subject to the following minimum capitalization norms:

(i)
US $0.5 million for foreign capital upto 51% to be brought up front.
(ii)
US $ 5 million for foreign capital more than 51% and upto 75% to be brought
up front.
(iii)
US $ 50 million for foreign capital more than 75% out of which US$ 7.5 million to
be brought up front and the balance in 24 months.
(iv)
100% foreign owned NBFCs with a minimum capitalization of US$ 50 million can
set up step down subsidiaries for specific NBFC activities, without any restriction on
the number of operating subsidiaries and without bringing in additional capital.
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(v)
Joint Venture operating NBFCs that have 75% or less than 75% foreign investment
can also set up subsidiaries for undertaking other NBFC activities, subject to the
subsidiaries also complying with the applicable minimum capitalization norm
mentioned in (i), (ii) and (iii) above and (vi) below.
(vi)
Non- Fund based activities : US $0.5 million to be brought upfront for all permitted
non-fund based NBFCs irrespective of the level of foreign investment subject to the
following condition:
It would not be permissible for such a company to set up any subsidiary for any other
activity, nor it can participate in any equity of an NBFC holding/operating company.
Note:
The following activities would be classified as Non-Fund Based activities:

(a) Investment Advisory Services
(b) Financial Consultancy
(c) Forex Broking
(d) Money Changing Business
(e) Credit Rating Agencies
(vii)
This will be subject to compliance with the guidelines of RBI.

Note:
Credit Card business includes issuance, sales, marketing & design of various
payment products such as credit cards, charge cards, debit cards, stored value
cards, smart card, value added cards etc.
3. The NBFC will have to comply with the guidelines of the relevant regulators, as applicable.
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16. FDI in Petroleum & Natural Gas Sector

1. Exploration activities of oil and natural gas fields, infrastructure related to marketing of petroleum products
and natural gas, marketing of natural gas and petroleum products, petroleum product pipelines, natural
gas/pipelines, LNG Regasification infrastructure, market study and formulation and Petroleum refining in
the private sector, subject to the existing sectoral policy and regulatory framework in the oil marketing
sector and the policy of the Government on private participation in exploration of oil and the discovered
fields of national oil companies.
2. Petroleum refining by the Public Sector Undertakings (PSU), without any disinvestment or dilution of
domestic equity in the existing PSUs. 49% Government.
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17. FDI in Print Media

1. Publishing of Newspaper and periodicals dealing with news and current affairs 26% (FDI and investment
by NRIs/PIOs/FII)
2. Publication of Indian editions of foreign magazines dealing with news and current affairs
26% (FDI and investment by NRIs/PIOs/FII)
Other Conditions:
(i)
Magazine, for the purpose of these guidelines, will be defined as a periodical publication,
brought out on non-daily basis, containing public news or comments on public news.
(ii)
Foreign investment would also be subject to the Guidelines for Publication of Indian editions
of foreign magazines dealing with news and current affairs issued by the Ministry of
Information & Broadcasting on 4.12.2008.
Page 88

3. Publishing/printing of Scientific and Technical Magazines/specialty journals/ periodicals, subject to
compliance with the legal framework as applicable and guidelines issued in this regard from time to time
by Ministry of Information and Broadcasting.
4. Publication of facsimile edition of foreign newspapers.

Other Conditions:
(i)
FDI should be made by the owner of the original foreign newspapers whose facsimile edition is
proposed to be brought out in India.
(ii)
Publication of facsimile edition of foreign newspapers can be undertaken only by an entity

incorporated or registered in India under the provisions of the Companies Act, 1956.
(iii)
Publication of facsimile edition of foreign newspaper would also be subject to the Guidelines for
publication of newspapers and periodicals dealing with news and current affairs and publication of
facsimile edition of foreign newspapers issued by Ministry of Information & Broadcasting on
31.3.2006, as amended from time to time.
18. FDI in Telecommunication

Investment caps and other conditions for specified services are given below. However, licensing and security
requirements notified by the Department of Telecommunications will need to be complied with for all services.
Telecom services 74% Automatic up to 49% Government route beyond 49% and up to 74%.
Other conditions:
1. General Conditions:
Page 89
(i)
This is applicable in case of Basic, Cellular, Unified Access Services, National/ International
Long Distance, V-Sat, Public Mobile Radio Trunked Services (PMRTS), Global Mobile
Personal Communications Services (GMPCS) and other value added Services.
(ii)
Both direct and indirect foreign investment in the licensee company shall be counted for the
purpose of FDI ceiling. Foreign Investment shall include investment by Foreign Institutional
Investors (FIIs), Non-resident Indians (NRIs), Foreign Currency Convertible Bonds (FCCBs),
American Depository Receipts (ADRs), Global Depository Receipts (GDRs) and convertible
preference shares held by foreign Entity. In any case, the `Indian shareholding will not be
less than 26 percent.
(iii)
FDI in the licensee company/Indian promoters/investment companies including their holding

companies shall require approval of the Foreign Investment Promotion Board (FIPB) if it has
a bearing on the Overall ceiling of 74 percent. While approving the investment proposals, FIPB
shall take note that investment is not coming from countries of concern and/or unfriendly entities.
(iv)
The investment approval by FIPB shall envisage the conditionality that Company would
adhere to licence Agreement.
(v)
FDI shall be subject to laws of India and not the laws of the foreign country/countries.
2. Security Conditions:
(i)
The Chief Officer In-charge of technical network operations and the Chief Security Officer
should be a resident Indian citizen.
(ii)
Details of infrastructure/network diagram (technical details of the network) could be provided

on a need basis only to telecom equipment suppliers/manufacturers and the affiliate/parents of
the licensee company. Clearance from the licensor (Department of Telecommunications)
would be required if such information is to be provided to anybody else.
(iii)
For security reasons, domestic traffic of such entities as may be identified /specified by the
licensor shall not be hauled/routed to any place outside India.
(iv)
The licensee company shall take adequate and timely measures to ensure that the information
transacted through a network by the subscribers is secure and protected.
(v)
The officers/officials of the licensee companies dealing with the lawful interception of
messages will be resident Indian citizens.
(vi)
The majority Directors on the Board of the company shall be Indian citizens.
(vii)
The positions of the Chairman, Managing Director, Chief Executive Officer (CEO) and/or
Chief Financial Officer (CFO), if held by foreign nationals, would require to be security
vetted by Ministry of Home Affairs (MHA). Security vetting shall be required periodically on
yearly basis. In case something adverse is found during the security vetting, the direction of
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MHA shall be binding on the licensee.
(viii)
The Company shall not transfer the following to any person/place outside India:(a)
Any accounting information relating to subscriber (except for international

roaming/billing) (Note: it does not restrict a statutorily required disclosure of
financial nature).
(b)
User information (except pertaining to foreign subscribers using Indian Operators

network while roaming).
(ix)
The Company must provide traceable identity of their subscribers. However, in case of
providing service to roaming subscriber of foreign Companies, the Indian Company shall
endeavour to obtain traceable identity of roaming subscribers from the foreign company as a
part of its roaming agreement.
(x)
On request of the licensor or any other agency authorised by the licensor, the telecom service
provider should be able to provide the geographical location of any subscriber (BTS location)
at a given point of time.
(xi)
The Remote Access (RA) to Network would be provided only to approved location(s) abroad
through approved location(s) in India. The approval for location(s) would be given by the
Licensor (DOT) in consultation with the Ministry of Home Affairs.
(xii)
Under no circumstances, should any RA to the suppliers/manufacturers and affiliate(s) be

enabled to access Lawful Interception System(LIS), Lawful Interception Monitoring(LIM),
Call contents of the traffic and any such sensitive sector/data, which the licensor may notify
from time to time.
(xiii)
The licensee company is not allowed to use remote access facility for monitoring of content.
(xiv)
Suitable technical device should be made available at Indian end to the designated security
agency /licensor in which a mirror image of the remote access information is available on line
for monitoring purposes.
(xv)
Complete audit trail of the remote access activities pertaining to the network operated in India
should be maintained for a period of six months and provided on request to the licensor or
any other agency authorised by the licensor.
(xvi)
The telecom service providers should ensure that necessary provision (hardware/software) is
available in their equipment for doing the Lawful interception and monitoring from a
centralized location.
(xvii)
The telecom service providers should familiarize/train Vigilance Technical Monitoring

(VTM)/security agency officers/officials in respect of relevant operations/features of their
systems.
Page 91
(xviii) It shall be open to the licensor to restrict the Licensee Company from operating in any
sensitive area from the National Security angle.
(xix)
In order to maintain the privacy of voice and data, monitoring shall only be upon
authorisation by the Union Home Secretary or Home Secretaries of the States/Union
Territories.
(xx)
For monitoring traffic, the licensee company shall provide access of their network and other
facilities as well as to books of accounts to the security agencies.
(xxi)
The aforesaid Security Conditions shall be applicable to all the licensee companies operating
telecom services covered under this circular irrespective of the level of FDI.
(xxii)
Other Service Providers (OSPs), providing services like Call Centres, Business Process
Outsourcing (BPO), tele-marketing, tele-education, etc, and are registered with DoT as OSP.
Such OSPs operate the service using the telecom infrastructure provided by licensed telecom
service providers and 100% FDI is permitted for OSPs. As the security conditions are
applicable to all licensed telecom service providers, the security conditions mentioned above
shall not be separately enforced on OSPs.
3. The above General Conditions and Security Conditions shall also be applicable to the companies operating
telecom service(s) with the FDI cap of
4. All the telecom service providers shall submit a compliance report on the aforesaid conditions to the
licensor on 1st day of July and January on six monthly basis.
Page 92
19. FDI in Trading

1. Cash & Carry Wholesale Trading/ Wholesale Trading (including sourcing from MSEs)
Definition: Cash & Carry Wholesale trading/Wholesale trading, would mean sale of goods/merchandise to
retailers, industrial, commercial, institutional or other professional business users or to other wholesalers
and related subordinated service providers. Wholesale trading would, accordingly, be sales for the purpose
of trade, business and profession, as opposed to sales for the purpose of personal consumption. The
yardstick to determine whether the sale is wholesale or not would be the type of customers to whom the
sale is made and not the size and volume of sales. Wholesale trading would include resale, processing and
thereafter sale, bulk imports with ex-port/ex-bonded warehouse business sales and B2B e-Commerce.
Guidelines for Cash & Carry Wholesale Trading/Wholesale Trading (WT):
(a)
For undertaking WT, requisite licenses/registration/ permits, as specified under the relevant
Acts/Regulations/Rules/Orders of the State Government/Government Body/Government
Authority/Local Self-Government Body under that State Government should be obtained.
(b)
Except in case of sales to Government, sales made by the wholesaler would be considered as
cash & carry wholesale trading/wholesale trading with valid business customers, only when
WT are made to the following entities:
(I)
Entities holding sales tax/ VAT registration/service tax/excise duty registration.
(II)
Entities holding trade licenses i.e. a license/registration certificate/membership

certificate/registration under Shops and Establishment Act, issued by a Government
Authority/ Government Body/ Local Self-Government Authority, reflecting that the
entity/person holding the license/ registration certificate/ membership certificate, as
the case may be, is itself/ himself/herself engaged in a business involving
commercial activity.
(III)
Entities holding permits/license etc. for undertaking retail trade (like the bazari and
similar license for hawkers) from Government Authorities/Local Self Government
Bodies.
(IV)
Institutions having certificate of incorporation or registration as a society or

registration as public trust for their self-consumption.
Note: An Entity to whom WT is made, may fulfill any one of The 4 conditions.
( c)
Full records indicating all the details of such sales like name of entity, kind of entity,
Page 93

registration/license/permit etc. number, amount of sale etc. should be maintained on a day to
day basis.
(d)
WT of goods would be permitted among companies of the same group. However, such WT to
group companies taken together should not exceed 25% of the total turnover of the wholesale
venture.
(e)
WT can be undertaken as per normal business practice, including extending credit facilities
subject to applicable regulations.
(f)
A Wholesale/Cash & carry trader cannot open retail shops to sell to the consumer directly.
2. E-commerce activities 100% Automatic:

E-commerce activities refer to the activity of buying and selling by a company through the e-commerce
platform. Such companies would engage only in Business to Business (B2B) e-commerce and not in retail
trading, inter-alia implying that existing restrictions on FDI in domestic trading would be applicable to ecommerce as well.
3. Test marketing of such items for which a company has approval for manufacture, provided such test
marketing facility will be for a period of two years, and investment in setting up manufacturing facility
commences simultaneously with test marketing.
4. Single Brand product trading4 51% Government:

(i)
Foreign Investment in Single Brand product trading is aimed at attracting investments in

production and marketing, improving the availability of such goods for the consumer,
encouraging increased sourcing of goods from India, and enhancing competitiveness of
Indian enterprises through access to global designs, technologies and management practices.
(ii)
FDI in Single Brand products retail trade would be subject to the following conditions:
(iii)
(a)
Products to be sold should be of a Single Brand only.
(b)
Products should be sold under the same brand internationally i.e. products should be
sold under the same brand in one or more countries other than India.
(c)
Single Brand product-retailing would cover only products which are branded
during manufacturing.
Application seeking permission of the Government for FDI in retail trade of Single Brand
products would be made to the Secretariat for Industrial Assistance (SIA) in the Department
of Industrial Policy & Promotion. The application would specifically indicate the product/
Page 94

product categories which are proposed to be sold under a Single Brand. Any addition to the
product/ product categories to be sold under Single Brand would require a fresh approval of
the Government.
(iv)
Applications would be processed in the Department of Industrial Policy & Promotion, to

determine whether the products proposed to be sold satisfy the notified guidelines, before
being considered by the FIPB for Government approval.
20. FDI in Courier services

Courier services for carrying packages, parcels and other items which do not come within the ambit of the
Indian Post Office Act, 1898.
1. 100% FDI is allowed under the Government route.
2. This will be subject to existing Law. i.e Indian Post Office Act 1898 and exclusion of activity relating to
the distribution of letters.
Note :
Minimum capitalization includes share premium received along with the face value of the share,
only when it is received by the company upon issue of the shares to the non-resident investor.
Amount paid by the transferee during post-issue transfer of shares beyond the issue price of the
share, cannot be taken into account while calculating minimum capitalization requirement.
Page 95
21. FDI in the Retail sector:

Retailing is one of the worlds largest private industries. Liberalizations in FDI have caused a massive
restructuring in retail industry. The benefit of FDI in retail industry superimposes its cost factors. Opening the
retail industry to FDI will bring forth benefits in terms of advance employment, organized retail stores,
availability of quality products at a better and cheaper price. It enables a countrys product or service to enter
into the global market.
Cheaper production facilities:
FDI will ensure better operations in production cycle and distribution.
Due to economies of operation, production facilities will be available at a cheaper rate thereby resulting in
availability of variety products to the ultimate consumers at a reasonable and lesser price.
Availability of new technology:
FDI enables transfer of skills and technology from overseas and
develops the infrastructure of the domestic country. Greater managerial talent inflow from other countries
is made possible. Domestic consumers will benefit getting great variety and quality products at all price
points.
Long term cash liquidity:
FDI will provide necessary capital for setting up organized retail chain
stores. It is a long term investment because unlike equity capital, the physical capital invested in the
domestic company is not easily liquidated.
Page 96

Lead driver for the countrys economic growth:
FDI would create a competition among the global investors, which
would ultimately ensure better and lower prices thus benefiting people in all sections of the society. There
would be an increase in the market growth and expansion. It will increase retail employment and suppress
untrained manpower and lack of experience. It will ensure better managerial techniques and success.
Higher wages will be paid by the international companies. Urban consumers will be exposed to
international lifestyles.
R. ECONOMIC INDICATORS
MARKETS
GOVERNMENT BOND 10Y
CURRENCY
STOCK MARKET
LAST
PREVIOUS AVERAGE TREND
8.13
8.17
9.25
60.87
60.64
31.77
18789.34
19345.70
5771.00
LAST
UNIT
REFERENCE
Percent
2015-08-08
2015-08-09
Index points
2015-08-08
UNIT
REFERENCE
GDP
GDP CONSTANT PRICES
15836.11
15062.09
11470.23
INR Billion
2015-02-15
GROSS FIXED CAPITAL FORMATION
5170.39
4816.38
3454.07
INR Billion
2015-02-15
GROSS NATIONAL PRODUCT
88981.17
77135.07
12619.53
INR Billion
2011-06-30
GDP PER CAPITA
1106.80
1085.73
448.91
USD
2014-12-31
GDP PER CAPITA PPP
3649.53
3372.66
1446.39
USD
2011-12-31
GDP ANNUAL GROWTH RATE
4.80
4.70
5.84
Percent
2015-03-31
GDP GROWTH RATE
1.30
0.80
1.63
Percent
2014-12-31
1841.70
1872.90
485.65
USD Billion
2014-12-31
UNIT
REFERENCE
GDP
LAST
LABOUR
POPULATION
1217.00
1202.00
728.64
Million
2014-12-31
EMPLOYED PERSONS
28999.00
28708.00
25060.23
Thousand
Persons
2011-12-31
Page 97
UNEMPLOYED PERSONS
39974.00
41466.00
36801.26
Thousand
Persons
2007-12-31
UNEMPLOYMENT RATE
3.80
9.40
7.57
Percent
2011-12-31
UNIT
REFERENCE
PRICES
INFLATION RATE
LAST
4.86
4.70
7.72
Percent
2015-06-30
CONSUMER PRICE INDEX (CPI)
231.00
228.00
55.81
Index Points
2015-06-15
EXPORT PRICES
223.00
196.00
150.38
Index Points
2011-06-30
GDP DEFLATOR
159.30
146.50
125.14
Index Points
2014-12-31
IMPORT PRICES
243.00
215.00
174.85
Index Points
2011-06-30
PRODUCER PRICES
172.70
171.60
130.04
Index Points
2015-06-15
UNIT
REFERENCE
MONEY
FOREIGN EXCHANGE RESERVES
LAST
15102.00
14760.70
4893.57
INR Billion
2015-07-31
INTERBANK RATE
7.48
7.31
7.48
Percent
2015-06-15
MONEY SUPPLY M1
19298.70
19197.30
3691.20
INR Billion
2015-07-31
MONEY SUPPLY M2
19349.17
19247.67
6793.11
INR Billion
2015-07-31
MONEY SUPPLY M3
87567.88
85930.00
13850.82
INR Billion
2015-07-31
7.25
7.25
6.57
Percent
2015-07-30
UNIT
REFERENCE
INTEREST RATE
TRADE
LAST
CURRENT ACCOUNT
-18.10
-32.63
-1.51
USD Billion
2015-03-31
CURRENT ACCOUNT TO GDP
-4.80
-4.20
-1.45
Percent
2014-12-31
345819.00
305931.00
140319.65
USD Million
2014-12-31
1954.00
2802.00
923.56
USD Million
2015-05-15
EXTERNAL DEBT
FOREIGN DIRECT INVESTMENT
Page 98
REMITTANCES
7845.07
8173.09
7657.98
USD Million
2015-02-15
TERMS OF TRADE
113.00
91.00
90.00
Index Points
2011-06-30
BALANCE OF TRADE
-715.31
-1108.12
-120.37
INR Billion
2015-06-15
EXPORTS
1389.02
1348.08
246.34
INR Billion
2015-06-15
IMPORTS
2104.33
2456.19
368.19
INR Billion
2015-06-15
UNIT
REFERENCE
GOVERNMENT
GOVERNMENT DEBT TO GDP
LAST
67.57
68.05
74.56
Percent
2014-12-31
GOVERNMENT BUDGET VALUE
-2628.23
-1806.91
-1237.76
INR Billion
2015-06-30
GOVERNMENT EXTERNAL DEBT
345819.00
305931.00
140319.65
USD Million
2014-12-31
1773.81
1821.98
1262.77
INR Billion
2015-02-15
-5.80
-3.84
Percent of GDP
2014-12-31
UNIT
REFERENCE
GOVERNMENT SPENDING
CREDIT RATING
47.12
GOVERNMENT BUDGET
-4.80
BUSINESS
CAR REGISTRATIONS
LAST
205381.00
208507.00
87168.33
Cars
2015-05-15
CHANGES IN INVENTORIES
597.31
556.98
375.11
INR Billion
2015-02-15
INDUSTRIAL PRODUCTION
-1.60
2.00
7.03
Percent
2015-05-31
BUSINESS CONFIDENCE
51.20
51.30
60.14
CONSUMER
BANK LENDING RATE
CONSUMER SPENDING
DISPOSABLE PERSONAL INCOME
PERSONAL SAVINGS
CONSUMER CONFIDENCE
LAST
2015-06-30
UNIT
REFERENCE
10.25
10.25
14.17
Percent
2015-07-15
8668.54
9255.44
6712.74
INR Billion
2015-02-15
INR Million
2011-06-30
INR Billion
2014-06-29
71640930.00 60158160.00 10220093.02

20037.20
18329.01
2778.25
118.00
120.00
118.88
Page 99
2015-06-30
S.
TOP 10 FDI EQUITY INFLOW CASES FROM

APRIL 2000 TO JANUARY 2015
Country: Mauritius
Sr.
No.
Name of Indian
Company
FDI
Route
Name of Foreign
Collaborator
IDEA CELLUR
LTD
RBI
TMI
MAURITIUS
LTD
I FLIEX
SOLUTIONS
LTD
RBI
INDIA DEBT
MANAGEMEN
T LTD
RBI Regional
Office
Item of
Manufacture
Amount of FDI
Inflows
(In Rs
crore)
7,294.48
(In US$
million)
1,600.9
5
AHMEDABAD
TELEPHONE
COMMUNICATIO
N SERVICES
ORACLE
GLOBAL( MAU
RITIUS) LTD
REGION NOT
INDICATED
SOFTWARE
DEVELOPMENT.
4,805.58
1,083.9
9
RBI
MAURITIUS
DEBT
MANAGEMENT
LTD
MUMBAI
COMMERCIAL
LOAN
COMPANIES
ACTIVITIES
3,800.00
956.39
BHAIK
INFOTEL P.
LTD.
FIPB
VODAFONE
MAURITIUS
LTD.
NEW DELHI
TELEPHONE
COMMUNICATIO
N SERVICES
3,268.12
801.37
ETISALAT DB
TELECOM P.
LTD
HOUSING
DEVELOPME
N T FINANCE
CORPN. LTD.
RBI
ETISALAT
MAURITIUS
LTD.
CMP ASIA LTD.
MUMBAI
TELEPHONE
COMMUNICATIO
N SERVICES
HOUSING
FINANCE
COMPANIES
3,228.45
667.93
2,638.25
653.74
I FLEX
SOLUTIONS
LTD
FIPB
REGION NOT
INDICATED
IT TO FINIANCIAL
SERVICE
INDUSTRY
2,578.88
563.94
DSP MERRILL
LYNCH LTD.
RBI
REGION NOT
INDICATED
FINANCIAL
SERVICES
PROVIDER
2,230.02
483.55
DABHOL
POWER
COMPANY
LTD
ADITYA
BIRLA
TELECOM
LTD.
FIPB
ORACLE
GLOBAL
MAURITIUS
LTD
MERRILL
LYNCH
(MAURITIUS)
LTD.
NA
MUMBAI
NA
2,160.35
450.07
MUMBAI
TELEPHONE
COMMUNICATIO
N SERVICES
2,098.25
419.13
34,102.3
6
7,681.06
10
RBI
FIPB
P S ASIA
HOLDING
INVESTMENT
(MAURITIUS)
Grand Total
MUMBAI
Page 100
Country: Singapore
Sr.
No
Name of Indian
Company
FDI
Route
Name of Foreign
Collaborator
RBI Regional
Office
Item of
Manufacture
Amount of FDI
Inflows
(In Rs
crore)
1,851.91
(In US$
million)
458.89
1,794.59
387.37
FINANCIAL
LEASING
COMPANIES
ACTIVITIES.
MINING OF IRON
ORE
1,711.24
368.35
1,496.00
378.62
DATAPROCESSIN
G SOFTWARE
DEVELOPMENT
AND COMPUTER
CONSULTANCY
SERVICES
INVESTMENT
RESEARCH AND
COUNSELLING
ACTIVITIES
INVESTMENT
RESEARCH AND
COUNSELLING
ACTIVITIES
INVESTMENT
RESEARCH
COUNSELLING
ACTIVITIES
1,406.25
328.27
1,334.18
273.21
1,334.18
273.21
1,170.32
239.65
RELOGISTICS
INFRASTRUC
TURE P. LTD.
RBI
BIOMETRIX
MARKETING P.
LTD.
MUMBAI
DLF ASSETS
LTD
RBI
NEW DELHI
AAA GLOBAL
VENTURES
PVT LTD
RBI
DAL
SINGAPORE
INVESTMENTS
PTE LTD
BARCLAYS
BANK PLC
ESSEL
MINING
INDUSTRIES
LTD.
LPCUBE
SYSTEMS (I)
P. LTD.
RBI
SURYA ABHA
INVESTEMENT
PTE.
KOLKATA
RBI
VIDHYA
JAYARAMAN
CHENNAI
HINDUSTAN
COCO- COLA
HOLDINGS
PVT LTD
HINDUSTAN
COCO- COLA
HOLDINGS
PVT LTD
HINDUSTAN
COCO- COLA
HOLDINGS
PVT LTD
FIPB
MUMBAI
RELIANCE
GAS
TRANSPORTA
TION INFRAS.
RELIANCE
PORTS AND
TERMINALS
LTD.
RBI
HINDUSTAN
COCA- COLA
OVERSEAS
HOLDING PT
HINDUSTAN
COCA- COLA
OVERSEAS
HOLDING PTE
BHARAT COCOCOLA
OVERSEAS
HOLDINGS PVT
LTD
BIO METRIX
MARKETING P.
LTD.
MUMBAI
GENERATION OF
GAS IN GASWROKS
875.60
222.01
BIOMETRIX
MARKETING
PVT.LTD.
AHMEDABAD
OTHER
BUSSINESS
SERVICES NOT
ELSEWHERE
CLASSIFIED OR
INCLUDED.
830.33
205.75
13,804.6
0
3,135.34
10
FIPB
FIPB
RBI
MUMBAI
MUMBAI
MUMBAI
Grand Total
Page 101
BOTTLING OF
NATURAL GAS
OR LIQUIFIED
PETROLEUM GAS
CONSTRUCTION
Country: U.S.A
Sr.
No
Name of Indian
Company
FDI
Route
Item of
Manufacture
Amount of FDI
Inflows
(In Rs
crore)
1,903.93
(In US$
million)
451.97
AHMEDABAD
STEEL MFR..
RBI
MUMBAI
1,419.82
297.21
GMR
INFRASTRUC
TURE LTD
CAIRN INDIA
LTD
RBI
26 VARIOUS FIIS
BANGALORE
BUSINESS
SERVICES NOT
ELSEWHERE
CLASSIFIED
MISCELLANEOUS
1,200.34
256.28
RBI
ORIENT
GLOBAL
TAMARIND
FUND PVT LTD
MUMBAI
BUSINESS
SERVICES NOT
ELSEWHERE
CLASSIFIED
1,114.77
233.36
ANANT RAJ
INDUSTRIES
LTD.
FORD INDIA
LTD
RBI
DEUTSCHE
BANK TRUST
CO.
FORD MOTOR
COMPANY
NEW DELHI
MISCELLANEOUS
608.07
132.30
CHENNAI
MANUFACTURE
OF MOTOR CARS
& OTHER MOTOR
VEHICLES
546.77
111.96
E-SERVE
INTERNATIO
NAL LTD
FIPB
CITIBANK
OVERSEAS
INVESTMENT
CORP.
REGION NOT
INDICATED
LESING HIRE
PURCHASE
518.91
112.81
PTC INDIA
LTD.
RBI
AS PER
ANNEXURE
NEW DELHI
ELECTRIC ITY
GENERAT ION,
TRANSMISSION &
DISTRIBUTION
499.99
103.22
KOTAK
MAHINDRA
BANK LTD.
RBI
BK OF
NEWYORK
MUMBAI
450.00
102.21
10
JSW ENERGY
LTD
RBI
VARIOUS
INVESTORS
MUMBAI
BANKING
ACTIVITIES
INCLUDING
FINANCIAL
SERVICES
GENERATION
AND
TRANSMISSION
OF ELECTRIC
ENERGY
PRODUCED IN
HYDROELECTRIC POWER
PLANTS
431.39
97.14
8,693.98
1,898.46
RBI
RBI Regional
Office
ESSAR
LOGIISTICS
HOLDINGS
LTD
PETRONAS
INTL CORPN
LTD
ESSAR STEEL
LTD
CAIRN INDIA
LTD
Name of Foreign
Collaborator
RBI
Grand Total
Page 102
Country: United Kingdom

Sr.
No
Name of Indian
Company
FDI
Route
Name of Foreign
Collaborator
RBI Regional
Office
Item of
Manufacture
Amount of FDI
Inflows
(In Rs
crore)
6,663.24
(In US$
million)
1,492.8
2
CAIRN (I) LTD.
RBI
CAIRAN UK
HOLDING
MUMBAI
BUSINESS
SERVICES NOT
ELSEWHERE
CLASSIFIED
RELIANCE
PORTS AND
TERMINAL
LTD
RBI
HSBC BANK
PLC
REGION NOT
INDICATED
OPERATING PORT
FACILITES.
1,530.00
385.07
RELIANCE
HOLIDAYS
AND
RESORTS
INDIA
LTD
CASTROL
INDIA LTD
HIMACHAL
FUTURISTIC
COMMUNATI
ONS LTD
RBI
HSBC BANK
PLC
REGION NOT
INDICATED
OPERATING PORT
FACILITIES.
946.56
238.23
FIPB
CASTROL LTD
NA
864.57
192.13
RBI
ECOM COM
COMMUNICATI
ON LTD
REGION NOT
INDICATED
CHANDIGARH
NA
810.38
168.83
RBI
VARIOUS NIRS/
FIIS
AHMEDABAD
SERVICES NEC
710.57
178.84
FIPB
THE BOC
GROUP PLC
KOLKATA
MANUFACTURE
OF INDUSTRIA
GASES
OTHER
FINANCIAL
SERVICES N.E.C.
597.30
139.49
454.39
102.90
EXPLORATION
ON
DEVELOPMENT
& PRODUCTION
OF OIL AND
NATURAL GAS
INVESTMENT
RESEARCH AND
COUNSELLING
ACTIVITIES.
376.58
82.65
324.00
76.91
13,277.5
9
3,057.8
8
4
5
MUNDRA
PORT AND
SEZ LTD
BOC (I) LTD.
STANDARD
CHARTERED
INVESTMENT
& LOANS LD
FIPB
STANDARD
CHARTERED
BANK
MUMBAI
HINDUSTAN
OIL
EXPLORATIO
N COM. LTD.
RBI
ENI UK
HOLDINGS PLC
REGION NOT
INDICATED
10
J. P. MORGAN
SECURITIES
PVT. LTD.
RBI
J. P. MORGAN
INTERNATIONA
L FINANCE LTD.
MUMBAI
Grand Total
Fazlani Altius Business School [Batch : 2015-2015] Page 103
Country: Netherlands
Sr.
No.
Name of Indian
Company
FDI
Route
Name of Foreign
Collaborator
RBI Regional
Office
Item of
Manufacture
Amount of FDI
Inflows
(In Rs
crore)
(In US$
million)
CONSTRUCTION
OF RESIDENTIAL
BUILDINGS
MANUFACTURE
OF MOTOR CARS
& OTHER MOTOR
VEHICLES
COMPUTER
SOFTWARE
1,109.90
281.44
1,025.80
230.98
950.52
206.64
DEVELOPING
AND
SUBDIVIDING
REAL ESTATE
INTO LOTS
MANUFACTURER
S AND DEALERS
OF PULP PAPER
BOARDS
682.05
150.01
637.94
148.57
NEW DELHI
BREWERIES
597.36
129.86
EMAAR MGF
LAND PVT.
LTD.
NISSAN
MOTOR INDIA
PVT LTD
RBI
HORIZON INDIA
B.V.
NEW DELHI
RBI
NISSAN INTL
HOLDING BV
CHENNAI
DIGITAL
GLOBAL SOFT
LTD
FIPB
HEWLETT
PACKARD
LEIDEN B.V.
REGION NOT
INDICATED
EMAAR MGF
LAND P. LTD.
RBI
HORIZON (I) BV
NEW DELHI
BILT GRAPHIC
PAPER
PRODUCTS
LTD.
RBI
BALLAPUR
PAPER
HOLDING BV
REGION NOT
INDICATED
SAB MILLER
INDIA LTD
FIPB
M/S MY HOME
INDUSTRIES
LTD.
RBI
CRH INDIA
INVESTMENTS
BV
HYDERABAD
MANUFACTURE
OF CEMENT IN
THE FORM OF
CLINKERS
517.36
120.77
SKOL
BREWERIES
LTD.
SESA GOA
LTD.
RBI
SABMILLER
ASIA B.V.
MUMBAI
MANUFACTURE
OF BEER
489.11
114.22
RBI
STICHING
PENSIONFON
DS ABP
PANAJI
BASIC METALS &

ALLOYS
INDUSTRIES
480.00
104.78
VOLKSWAG
EN GROUP
SALES INDIA
PVT LTD
RBI
VOLKSWAGO N
AG
MUMBAI
MANUFACTURE
OF MOTOR
VEHICLES FOR
THE TRANSPORT
OF
GOODS,MANUFA
CTURE MOTOR
VEHICLE
418.17
91.78
6,908.21
1,579.05
10
Grand Total
Country: Japan
Sr.
No.
Name of Indian
Company
FDI
Route
Name of Foreign
Collaborator
RBI Regional
Office
Item of
Manufacture
Amount of FDI
Inflows
(In Rs
crore)
1,440.83
(In US$
million)
341.85
ANCHOR
ELECTRICALS
PVT LTD
FIPB
MATSUSHITA
ELECTRIC
WORKS LTD
REGION NOT
INDICATED
ELECTRICAL
PRODUCTS.
KOTAK
MAHINDRA
BANK LTD
RBI
SUMITO MITSUI
BANKING
CORPORATION
MUMBAI
BANKING
ACTIVITIES
INCLUDING
FINANCIAL
SERVICES
1,366.12
303.47
TELCO
CONSTRUCTI
ON
EQUIPMENT
CO LTD
RBI
HITACHI
CONSTRUCTIO
N MACHINERY
CO LTD
REGION NOT
INDICATED
MFG
CONSTRUCTION
EQUIPMENT
1,159.50
260.56
MARUTI
UDYOG LTD
TATA
TELESERVICE
S
FIPB
SUZUKI MOTOR
CO. LTD.
NTT DOCOMO
INC
NEW DELHI
NA
1,000.00
208.33
REGION NOT
INDICATED
TELECOMMUNIC
ATION SERVICES
567.75
110.83
TATA
TELESERVICE
S
ANCHOR
ELECTRICALS
PVT. LTD.
RBI
NTT DOCOMO
INC
REGION NOT
INDICATED
465.14
92.91
RBI
PANASONIC
ELECTRIC
WORKS CO
LTD.
REGION NOT
INDICATED
TELECOMMUNIC
ATION S
SERVICES
MANUFACTURIN
G & MARKETING
OF ELECTRICAL
460.90
98.65
RENAULT
NISSAN
AUTOMOTIVE
INDIA PVT
LTD.
ANCHOR
ELECTRICALS
PVT. LTD.
RBI
NISSAN MOTOR
COMPANY LTD.
CHENNAI
MANUFACTURE
OF MOTOR CARS
& OTHER MOTOR
VEHICLES
450.00
99.65
RBI
MATSUSHITA
ELECTRICAL
MUMBAI
425.67
104.28
ESCORT
YAMAHA
MOTOR LTD.
FIPB
YAMAHA
MOTOR LTD
NEW DELHI
WHOLESALE
TRADE IN
ELECTRICAL
MACHINERY AND
EQUIPMENT
NA
400.00
88.89
7,735.91
1,709.42
10
RBI
Grand Total
Country: Cyprus
Sr.
No.
Name of Indian
Company
FDI
Route
Name of Foreign
Collaborator
RBI Regional
Office
Item of
Manufacture
TATA
CAPITAL LTD.
RBI
TRAVORTO
HOLDINGS LTD.
MUMBAI
FINANCIAL
LEASING
COMPANIES
ACTIVITIES
NATIONAL
STOCK
EXCHANGE
OF INDIA LTD
FIPB
GA GLOBAL
INVESTMENTS
LTD
REGION NOT
INDICATED
STOCK
EXCHANGE.
1,086.75
257.84
MAHINDRA &
MAHINDRA
LTD.
RBI
GOLBOOT
HOLDINGS LTD.
MUMBAI
MANUFACTURE
OF MOTOR CARS
& OTHER MOTOR
VEHICLES
700.00
153.86
MAHINDRA &
MAHINDRA
LTD.
RBI
GOLBOOT
HOLDINGS LTD.
MUMBAI
MOTOR CARS &

OTHER MOTOR
VEHICLES
700.00
142.86
D.B. REALITY
PVT LTD
RBI
WALKINSON
INVESTMENTS
LTD
MUMBAI
525.00
112.37
MAX INDIA
LTD
FIPB
XENOK LTD
CHANDIGARH`
521.93
112.08
KARANJA
TERMINAL
& LOGISTICS
PVT LTD
RBI
KARANJA
TERMINAL &
LOGISTICS
CYPRUS LTD
MUMBAI
PURCHASE,SALE,
LETTING AND
OPERATING OF
REAL ESTATERESIDENTIAL
AND NONRESIDENTIAL
BUILDINGS
OTHER
MANUFACTURIN
G INDUSTRIES
CARGO
HANDLING
INCIDENTAL TO
LAND
TRANSPORT
465.12
102.46
SWETA
ESTATES PVT
LTD
DYNAMIX
BALWAS
INFRASTRUC
TURE PVT.
LTD.
ESSAR
SHIPPING
PORTS
&LOGISTICS
LTD.
RBI
PROCTUSSA
LTD
NEW DELHI
REAL ESTATE
ACTIVITIES
434.99
86.89
RBI
GREET HAM
INVESTMENTS
LTD.
MUMBAI
CONSTRUCTION
387.69
83.14
RBI
ESSAR
SHIPPING
& LOGISTICS
LTD.
REGION NOT
INDICATED
SHIPPING &
LOGISTICS
SERVICE
PROVIDER
249.36
55.39
6,488.43
1,398.25
10
Grand Total
Amount of FDI
Inflows
(In Rs
(In US$
crore)
million)
1,417.59
291.35
Country: Germany
Sr.
No.
Name of Indian
Company
FDI
Route
Name of Foreign
Collaborator
RBI Regional
Office
Item of
Manufacture
Amount of FDI
Inflows
(In Rs
crore)
847.82
(In US$
million)
190.95
MICRO INKS
LTD
FIPB
MHM HOLDING
GMBH
REGION NOT
INDICATED
MFG PRINTING
INKS/ PKG INKD,
RESINS,
ENAMELS
ADHESIVES
APOLLO
ENERGY P.
LTD.
BAJAJ
ALLIANZE LIC
LTD.
RBI
DKY INIL
HEALTH
HOLDING
ALLIEANZ SE
NEW DELHI
MANUFACTURE
OF POWER
CAPACITORS
INSURANCE
CARRIERS, LIFE
736.72
151.80
509.88
118.75
METRO CASH
& CARRY (I)
P. LTD.
FIPB
METRO CASH &

CARRY
INTERNATIONA
L GMBH
BANGALORE
TRADING
381.16
89.01
BAJAJ
ALLIANZE LIC
LTD.
RBI
ALLIAZ SE
MUMBAI
INSURANCE
CARRIERS, LIFE
302.72
74.23
INDIAN OIL
TANKING
LTD.
FIPB
OIL TANKING
INDIA GMBH
MUMBAI
285.71
66.54
JOHN DEERE
(I) P. LTD.
SAINT
GOBAIN
GLASS
INDIA
LANXESS
INDIA PVT
LTD
BOMBAY
STOCK
EXCHANGE
RBI
DEEREE AND
CO.
MUMBAI
CONSTRUCTION
AND
MAINTENANCE
NOT
ELSEWHERE
CLASSIFIED
INTERNET
SERVICES
NA
221.16
54.80
210.00
43.75
MANUFACTURE
OF CHEMICAL
PRODUCTS
SECURITIES
DEALING
ACTIVITES
206.31
44.16
200.78
49.24
3,902.26
883.23
8
9
10
RBI
FIPB
RBI
FIPB
MUMBAI
CHENNAI
LANXESS
DEUTSCHLAND
GMBH
DEUTCH
BOARSE A.G.
Grand Total
MUMBAI
MUMBAI

Country: France
Sr.
No.
Name of Indian
Company
FDI
Route
Name of Foreign
Collaborator
RBI Regional
Office
Item of
Manufacture
Amount of FDI
Inflows
(In Rs
crore)
1,466.00
(In US$
million)
324.65
BHARATHI
CEMENT
CORPORATIO
N LTD.
RBI
PARFICIM
HYDERABAD
MANUFACTURE
OF CEMENT,
LIME & PLASTER
SREI
INTERNATIO
NAL FINANCE
LTD .
RBI
BNP PARIBAS
LEASING
GROUP (BPLG)
KOLKATA
OTHER
FINANCIAL
SERVICES N.E.C.
775.00
183.98
BHARATHI
CEMENT
CORP LTD
RBI
PARFICIM SAS
REGION NOT
INDICATED
MFG OF CEMENT
499.72
106.69
LAFARAGE
AGGREGATES
& CONCE(I) P.
LTD.
ZUARI
CEMENT LTD.
BILAG
INDUSTRIES
PVT LTD
LAFARGE
INDIA
HOLDING
PVT. LTD.
RBI
FINANCIERE
LAFARGE
MUMBAI
SERVICES NEC
380.00
77.55
RBI
NA
CHENNAI
NA
295.00
65.56
FIPB
AVENTIS
CROPSCIENCE
SA
NA
REGION NOT
INDICATED
NA
243.23
50.67
MUMBAI
NA
208.98
48.60
5
6
FIPB
SCHNEIDER
ELECTRIC
INDIA PVT
LTD
RBI
SCHNEIDER
ELCTRIC
INDUSTRIES
SAS
NEW DELHI
MANUFACTURE
OF MACHINERY
AND
EQUIPMENT
OTHER THAN
TRANSPORT
EQUIPMENT
195.32
40.29
GEOJIT
FINANCIAL
SERVICES
LTD.
RBI
BNP PARIBAS
SA
KOCHI
SECURITIES
DEALING
ACTIVITIES
183.86
38.49
10
MAHINDRA
RENAULT
PVT. LTD.
RBI
RENAULT SAS
MUMBAI
MANUFACTURE
OF MOTOR CARS
174.90
37.97
4,422.00
974.44
Grand Total
Country: UAE
Fazlani Altius Business School [Batch : 2015-2015]Page 108

Sr.
No.
Name of Indian
Company
FDI
Route
Name of Foreign
Collaborator
RBI Regional
Office
Item of
Manufacture
ADANI
POWER LTD.
RBI
VARIOUS NIRS
AHMEDABAD
GENERATION &
TRANSMISSION
OF ELECTRIC
ENERGY
INDIA BULLS
FINANCIAL
SERVICES
PVT LTD
RBI
CROWN
CAPITAL LTD
NEW DELHI
302.33
67.41
IL & FS
TRANSPORTA
TION
NETWORKS
LTD.
BHART
HOTELS LTD.
RBI
VARIOUS
INVESTORS
MUMBAI
DATA
PROCESSING,
SOFTWARE
DEVELOPMENT &
COMPUTER
CONSULTANCY
SERVICES.
OTHER
SERVICES
INCIDENTAL TO
TRANSPORT
N.E.C.
232.59
49.66
RBI
DUBAI
VENTURES LTD
NEW DELHI
164.00
38.93
DB REALITY
PVT LTD
RBI
VARIOUS
MUMBAI
153.95
33.06
ANRAK
ALUMINIUM
LTD.
RBI
RAK
INVESTMENT
AUTHORITY
HYDERABAD
HOTELS,
ROOMING
HOUSES, CAMPS
& OTHER
LODGING
PLACES.
PURCHASE,SALE,
LETTING AND
OPERATING OF
REAL ESTATE
ALUMINIUM
MANUFACTURIN
G
143.77
30.87
CONVERGEM
COMMUNICA
TION (INDIA)
LTD LTD
SPICEJET
RBI
AXIOM
TELECOM LLC
MUMBAI
140.00
34.98
RBI
ISTITHMAI PISC
NEW DELHI
137.76
32.68
INFRASTRUC
TURE
LEASING &
FINANCIAL
SEV.
RBI
ABU DHABI
INVESTMENT
AUTHORITY.
REGION NOT
INDICATED
WHOLESALE
TRADE NOT
ELSEWHERE
CLASSIFIED
AIR
TRANSPORT
CARRIERS
FINANCIAL
SERVCIES, ASSET
FINANCE &
INFRASTRUCTUR
E.
126.01
28.23
10
BALAJI
TELEFILM
LTD.
RBI
ASIAN
BROADCASTIN
G FZ-LLC
MUMBAI
VEDIO
PARLOURS,
ELECTRONIC
GAMES
123.25
29.26
2,705.46
589.06
Grand Total
Amount of FDI
Inflows
(In Rs
(In US$
crore)
million)
1,181.80
243.98
T. CONCLUSION
An analysis of the recent trends in FDI flows at the global level as well as across regions/countries suggests
that India has generally attracted higher FDI flows in line with its robust domestic economic performance and

gradual liberalisation of the FDI policy as part of the cautious capital account liberalisation process. Even
during the recent global crisis, FDI inflows to India did not show as much moderation as was the case at the
global level as well as in other EMEs. However, when the global FDI flows to EMEs recovered during 201415, FDI flows to India remained sluggish despite relatively better domestic economic performance ahead of
global recovery. This has raised questions especially in the backdrop of the widening of the current account
deficit beyond the sustainable level of about 3 per cent.
In order to analyse the factors behind such moderation, an empirical exercise was undertaken which did
suggest the role of institutional factors (Governments to implement quality policy regime) in causing the
slowdown in FDI inflows to India despite robustness of macroeconomic variables.
A panel exercise for 10 major EMEs showed that FDI is significantly influenced by openness, growth
prospects, macroeconomic sustainability (International Investment Position), labour cost and policy
environment.
A comparison of actual FDI flows to India vis--vis the potential level worked out on the basis of underlying
macroeconomic fundamentals showed that actual FDI which has generally tracked the potential level till 200910, fell short of its potential by about 25 per cent during 2014-15. Further, counter factual scenario attempted
to segregate economic and non-economic factors seemed to suggest that this large divergence between actual
and potential during 2014-15 was partly on account of rise in policy uncertainty .
Apart from the role of institutional factors, as compared to other EMEs, there are also certain sectors including
agriculture where FDI is not allowed, while the sectoral caps in some sectors such as insurance and media are
relatively low compared to the global patterns. In this context, it may be noted that the caps and restrictions are
based on domestic considerations and there is no uniform standards that fits all countries. However, as the
economy integrates further with the global economy and domestic economic and political conditions permit,
there may be a need to relook at the sectoral caps (especially in insurance) and restrictions on FDI flows
(especially in multi-brand retail). Further, given the international experience, it is argued that FDI in retail
would help in reaping the benefits of organised supply chains and reduction in wastage in terms of better prices
to both farmers and consumers. The main apprehensions in India, however, are that FDI in retail would expose
the domestic retailers especially the small family managed outlets - to unfair competition and thereby
eventually leading to large-scale exit of domestic retailers and hence significant job losses. A balanced and
objective view needs to be taken in this regard. Another important sector is the generation, transmission and
distribution of electricity produced in atomic power, where FDI is not permitted at present, may merit a revisit.
In this context, it may be noted that electricity distribution services is a preferred sector for FDI. According to
UNCTAD four out of top ten cross-border deals during 2014 were in this segment, which led to increase in

FDI in this sector even in the face of decline in overall FDI. Similarly, the demands for raising the present FDI
limits of 26 per cent in the insurance sector may be reviewed taking into account the changing demographic
patterns as well as the role of insurance companies in supplying the required long term finance in the economy.
Against this backdrop, it is pertinent to highlight the number of measures announced by the Government of
India on April 1, 2011 to further liberalise the FDI policy to promote FDI inflows to India. These measures,
inter alia included (i) allowing issuance of equity shares against non-cash transactions such as import of capital
goods under the approval route, (ii) removal of the condition of prior approval in case of existing joint
ventures/technical collaborations in the same field, (iii) providing the flexibility to companies to prescribe a
conversion formula subject to FEMA/SEBI guidelines instead of specifying the price of convertible
instruments upfront, (iv) simplifying the procedures for classification of companies into two categories
companies owned or controlled by foreign investors and companies owned and controlled by Indian
residents and (v) allowing FDI in the development and production of seeds and planting material without the
stipulation of under controlled conditions. These measures are expected to boost Indias image as a preferred
investment destination and attract FDI inflows to India in the near future.

U. LIST OF INVESTMENT PROMOTION AGENCIES IN INDIA STATE-WISE
Andaman & Nicobar(UT)
Andaman & Nicobar Islands Integrated Development Corporation Ltd (ANIIDCO)
Vikas Bhawan
A & N Islands
Port Blair - 744101
Tel: + 91 3192 232666
Fax: + 91 3192 235098
Website: http://www.aniidco.nic.in
Email: aniidco@vsnl.com
Andhra Pradesh
Andhra Pradesh Industrial Development Corporation Limited
Parishrama Bhavan,
5-9-58/B,Fateh Maidan Road
Post Box No.1049
Hyderabad - 500 004
Tel: + 91 40 23235253-56
Fax: + 91 40 23235516, 23236756
Website: http://www.apidc.org
Email: apidc@ap.gov.in
Arunachal Pradesh
Arunachal Pradesh Industrial Development and Financial Corporation Limited
C Sector
Near Petrol Pump
Itanagar - 791 111
Tel: + 91 360 2212672, 2212673
Fax: + 91 360 2212672
Email: koyutony@yahoo.com
Assam
Assam Industrial Development Corporation Ltd
RGB Road
Guwahati - 781 024
Tel: + 91 361 22003999
Fax: + 91 361 2202017
Email: aidcltd@gw1.dot.net.in
Bihar
Bihar State Credit and Investment Corporation Ltd (BICICO)
4th Floor, Indira Bhawan,
Ram Charitra Singh Path
P.B. No. 204 GPO
Patna - 800 001
Tel: + 91 612 228552, 232277
Fax: + 91 612 234298
Website: http://www.bicico.com
Email: bicico@vsnl.net
Chandigarh(UT)
Chandigarh Industrial and Tourism Development Corporation Ltd (CITCO)
SCO 121-122
Sector 17-B,
Chandigarh
Tel: + 91 172 2704761, 2704356
Fax: + 91 172-2705288
Website: http://www.citco.nic.in
Email: info@citcochandigarh.com
Chhattisgarh
Chhattisgarh State Industrial Development Corporation Ltd
B-4, M.R Colony
Sailendra Nagar
Raipur
Tel: + 91 771 2429024, 5055888
Fax: + 91 771 2429025
Website: http://www.csidcindia.com
Email: csidc@csidcindia.com
Dadra & Nagar Haveli(UT)
Omnibus Industrial Development Corporation of Daman & Diu and Dadra & Nagar Haveli Ltd
Paryatan Bhavan,
Nani Daman - 396210
Tel: + 91 260 2250743, 2250421, 2250903
Fax: + 91 260 2250328
Website: http://www.oidc.nic.in/
Email: paryatan_ad1@sancharnet.in
Daman & Diu(UT)

Omnibus Industrial Development Corporation of Daman & Diu and Dadra & Nagar Haveli Ltd
Paryatan Bhavan,
Nani Daman - 396210
Tel: + 91 260 2250743, 2250421, 2250903
Fax: + 91 260 2250328
Website: http://www.oidc.nic.in/
Email: paryatan_ad1@sancharnet.in
Delhi
Delhi State Industrial Development Corporation (DSIDC)
N Block Bombay Life Building
Connaught Circus
Delhi 110 001
Tel: + 91 11 23312015
Fax: + 91 11 23315067
Website: http://www.dsidc.org
Email: dsidc@nda.vsnl.net.in
Goa
Goa Industrial Development Corporation (GIDC)
Patto, Next to Passport Office
Panaji, Goa 403 001
Tel: + 91 832 2437470 to 73
Fax: + 91 832 2228012
Website: http://www.goaidc.com
Email: goaidc@sancharnet.in
Gujarat
Gujarat Industrial Development Corporation (GIDC)
Block # 4, 2nd Floor
Udyog Bhavn, Sector 11
Gandhinagar - 382 017
Tel: + 91 79 23225811, 23225805, 23225816

Fax: + 91 79 23221191, 23225815
Website: http://www.gidc.gov.in
Email: info@gidc.gov.in
Haryana
Haryana State Industrial Development Corporation (HSIDC)
Plot No.13-14,
Institutional Area, Sector 6
Panchkula-134109
Tel: + 91 172 2590481-83
Fax: + 91 172 2590474
Website: http://www.hsiidc.org/abouthsidc.htm
Email: hsidc@chd.nic.in
Himachal Pradesh
The Himachal Pradesh State Industrial Development Corporation (HPSIDC)
New Himrus Building
Circular Road
Shimla-171001
Tel: + 91 177 2624751, 2624752, 2624754, 2625422
Fax: + 91 177 2624278
Website: http://hpsidc.nic.in/
Email: hpsidc@sancharnet.in
Jammu & Kashmir
J&K State Industrial Development Corporation Ltd (SIDCO)
Srinagar SIDCO Office
Drabu House, Ram Bagh, Srinagar,
J&K - 190001
Jammu SIDCO Office
Shere Kashmir Bhavan, Vir Marg,
Jammu - 180001

Tel: + 91 194 430036
Fax: + 91 194 430036
Jharkhand
Directorate of Industry
Nepal House, 3rd Floor
Doranda, Ranchi
Tel: + 91 651 2491844
Fax: + 91 651 2491884
Email: doijharkhand@doijharkhand.net
Karnataka
Karnataka State Industrial Investment & Development Corporation Limited (KSIIDC)
MSIL House No 36
Cunningham Road
Bangalore - 560 052
Tel: + 91 80 2258131
Fax: + 91 80 2255740
Website: http://www.ksiidc.com
Email: ksiidc@bir.vsnl.net.in
Kerala
Kerala Industrial Infrastructure Development Corporation (KINFRA)
TC 31/2312 , KINFRA House
Sasthamangalam
Trivandrum - 695 010
Tel: + 91 471 2726585
Fax: + 91 471 2724773
Website: http://www.kinfra.com
Email: kinfra@vsnl.com
Lakshadweep(UT)
Department of Industries
UT of Lakshadweep,
Kavaratti - 682 555
Tel: + 91 4896 262325

Fax: + 91 4896 263132
Website: http://www.lakshadweep.nic.in/depts/industries/home.htm
Email: lk-doi@hub.nic.in
Madhya Pradesh
Madhya Pradesh State Industrial Development Corporation Ltd (MPSIDC)
AVN Towers, 192 Zone-1
M.P Nagar
Bhopal - 462011
Tel: + 91 755 5270370/246/247
Fax: + 91 755 5270280, 5203106
Website: http://www.mpsidc.org
Email: mpsidc@sancharnet.in
Maharashtra
Maharashtra Industrial Development Corporation Ltd (MIDC)
Udyog Sarathi
Mahakali Caves Road, Andheri (E),
Mumbai - 400 093
Tel: + 91 22 26870052 / 54 / 73, 26870800
Fax: + 91 22 26871587
Website: http://www.midcindia.org/
Email: feedback@midcindia.org
Manipur
Manipur Industrial Development Corporation Ltd
Industrial Estate
Takyelpat, P.B 46
Imphal - 795001
Tel: + 91 385 2223624, 2221967
Meghalaya
Meghalaya Industrial Development Corporation Ltd
"Kismat", Upland Road
Laitumkhrah
Shillong - 793 001

Tel: + 91 364 224965, 224763, 226941, 226893
Fax: + 91 91 364 224763
Website: http://www.meghalaya.nic.in/MIDC/midc.htm
Email: midc@shillong.meg.nic.in
Mizoram
Zoram Industrial Development Corporation
M.G Road
Upper Khatla
Aizawal 796001
Tel: + 91 389 2323217, 2326240
Email: zidco@sancharnet.in
Nagaland
Nagaland Industrial Development Corporation (NIDC)
IDC House
P.B No 5
Dimapur 797 112
Tel: + 91 3862 226473
Fax: + 91 3862 226473
Orissa
Orissa Industrial Infrastructure Development Corporation Ltd.
IDCO Tower, Janpath
Bhubaneswar - 751007
Tel: + 91 674 2540820, 2542784
Fax: + 91 2542956
Website: www.idcoindia.com/
Email: cmd@idcoindia.com
Pondicherry(UT)
Pondicherry Industrial Promotion Development and Investment Corporation Ltd
Post Box. No. 190
60, Romain Rolland Street
Pondicherry - 605 001
Tel: + 91 413 2334606, 2335116, 2334361, 2336842
Fax: + 91 413 336842

Website: http://www.pipdic.com
Email: md@pipdic.com
Punjab
The Punjab State Industrial Development Corporation Ltd
Udyog Bhawan
18, Himalaya Marg
Sector - 17
Chandigarh
Tel:+ 91 172 2702881-84, 2702791
Fax:+ 91 172 2704145
Website: http://www.punjabgovt.nic.in/Industry/ind552.htm
Email: psidc@sancharnet.net.in
Rajasthan
Rajasthan State Industrial Development & Investment Corporation Ltd
Udyog Bhawan
Tilak Marg
Jaipur - 302005
Tel:+ 91 141 5113201, 2227751
Fax:+ 91 141 5104804
Website: http://www.riico.co.in
Email: riico@riico.co.in
Sikkim
Sikkim Industrial Development & Investment Corporation Limited (SIDICO)
Tashiling Secretariat
Gangtok - 737103
Tel:+ 91 3592 202530
Fax:+ 91 3592 202851
Website: http://www.sikkiminfo.net/sidico/
Tamil Nadu
Tamil Nadu Industrial Development Corporation Ltd (TIDCO)
19-A, Rukmani Lakshmipathy Salai
Egmore

Chennai - 600008
Tel:+ 91 44 28554421
Fax:+ 91 44 28553729
Website: http://www.tidco.com
Email: cmdtidco@vsnl.com
Tripura
Tripura Industrial Development Corporation Ltd (TIDC)
Gorkha basti Office Complex
PO: Kunjaban
Agartala - 799006
Tel:+ 91 381 220342
Website: http://www.tripura.nic.in/tidc/
Uttar Pradesh
Uttar Pradesh State Industrial Development Corporation
UPSIDC Complex, A-1/4 Lakhanpur
Kanpur
Tel:+ 91 512 2582851, 2582852, 2582853
Fax:+ 91-512-2580797
Website: http://www.upsidc.com
Email: feedback@upsidc.com
Uttarakhand
State Infrastructure & Industrial Development Corporation of Uttarakhand Ltd.
2, New Cantt Road
Dehradun 248001
Tel:+ 91 135 2743292/97, 2743838
Fax:+ 91 135 2743288
Website: http://usidcl.gov.in/
Email: sidcul@sidcul.com

West Bengal
West Bengal Industrial Development Corporation (WBIDC)
5, Council Street House
Kolkata 700001
Tel:+ 91 33 22435343
Fax:+ 91 33 22483747
Website: http://www.wbidc.com
Email: chairman@wbidc.com
V. REFERENCES:
http://fdiindia.in/
http://dipp.nic.in/English/Publications/FDI_Statistics/FDI_Statistics.aspx

http://www.rbi.org.in/scripts/NotificationUser.aspx?Id=8209&Mode=0
http://www.rbi.org.in/scripts/BS_ViewMasCirculardetails.aspx?id=8104
http://www.allbankingsolutions.com/Banking-Tutor/FDI-in-India.htm
http://fdiindia.in/list-of-investment-promotion-agencies-in-india-state-wise.php
http://www.rbi.org.in/scripts/BS_ViewMasterCirculardetails.aspx
http://www.ibef.org/india-at-a-glance/foreign-direct-investment.aspx
http://www.ijmrbs.com/ijmrbsadmin/upload/IJMRBS_515da52cd191a.pdf
http://astrology.sify.com/astronews/foreign-investment-india-2015/
http://ftbsitessvr01.ft.com/forms/fDi/report2015/files/The_fDi_Report_2015.pdf
http://accman.in/images/feb13/Dharwal%20M.pdf
https://www.kpmg.com/IN/en/services/Tax/FlashNews/LiberalisationofForeignDirectInvestmentPolicy2015.pdf
http://almtlegal.com/articles-pdf/Newsflash%20on%20FDI%20policy%202015.pdf
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Economics Assignment: "Foreign Direct Investment (Fdi) in India"

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Economics Assignment: "Foreign Direct Investment (Fdi) in India"

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[FOREIGN DIRECT INVESTMENT (FDI) IN INDIA ]

[FOREIGN DIRECT INVESTMENT (FDI) IN INDIA ]

B. FOREIGN DIRECT INVESTMENT (FDI) FLOWS TO INDIA

C. WHO CAN INVEST IN INDIA

D. ENTITIES FOR FDI

E. ENTRY ROUTES FOR FDI

F. GUIDELINES FOR CONSIDERATION OF FDI PROPOSALS BY FIPB

G. TREND IN FDI FLOWS

H. TRENDS IN FDI FLOWS TO INDIA

1. Cumulative FDI flows into India (2000-2015)

2. Financial Year-Wise FDI inflow Data

STATEMENT ON COUNTRY-WISE FDI EQUITY INFLOWS

J. STATEMENT ON SECTOR-WISE FDI EQUITY INFLOWS

L. POTENTIAL FOR INVESTMENT IN INDIA

[FOREIGN DIRECT INVESTMENT (FDI) IN INDIA ]

N. FDI POLICY FRAMEWORK

2. FDI Policy: The International Experience

3. Cross-Country Comparison of FDI Policies Where does India stand?

O. FDI FLOWS TO INDIA IN RECENT PERIOD

P. APPROVAL FOR FDI IN LIMITED LIABILITY PARTNERSHIP FIRM

Q. SECTOR FOR FDI

6. FDI in Civil Aviation Sector

7. FDI in Banking- Public Sector

8. FDI in Credit Information Companies (CIC)

10. FDI in Commodity Exchanges

[FOREIGN DIRECT INVESTMENT (FDI) IN INDIA ]

12. FDI in Industrial Park

13. FDI in Insurance

14. FDI in Infrastructure Company in the Securities Market

15. FDI in Non-Banking Finance Companies (NBFC)

16. FDI in Petroleum & Natural Gas Sector

17. FDI in Print Media

18. FDI in Telecommunication

19. FDI in Trading

20. FDI in Courier services

21. FDI in Retail sector

S. TOP 10 FDI EQUITY INFLOW CASES

U. LIST OF INVESTMENT PROMOTION AGENCIES IN INDIA STATE-WISE

[FOREIGN DIRECT INVESTMENT (FDI) IN INDIA ]

[FOREIGN DIRECT INVESTMENT (FDI) IN INDIA ]

[FOREIGN DIRECT INVESTMENT (FDI) IN INDIA ]

[FOREIGN DIRECT INVESTMENT (FDI) IN INDIA ]

[FOREIGN DIRECT INVESTMENT (FDI) IN INDIA ]

B. FOREIGN DIRECT INVESTMENT (FDI) FLOWS TO INDIA

[FOREIGN DIRECT INVESTMENT (FDI) IN INDIA ]

C. WHO CAN INVEST IN INDIA

[FOREIGN DIRECT INVESTMENT (FDI) IN INDIA ]

D. ENTITIES FOR FDI

2. FDI in Partnership Firm / Proprietary Concern:

[FOREIGN DIRECT INVESTMENT (FDI) IN INDIA ]

5. FDI in other Entities:

E. ENTRY ROUTES FOR FDI

[FOREIGN DIRECT INVESTMENT (FDI) IN INDIA ]

F. GUIDELINES FOR CONSIDERATION OF FDI PROPOSALS BY FIPB:

[FOREIGN DIRECT INVESTMENT (FDI) IN INDIA ]

5. FIPB would consider each proposal in its totality.

7. While considering proposals the following may be prioritized:

[FOREIGN DIRECT INVESTMENT (FDI) IN INDIA ]

Issue/transfer/pricing of shares will be as per SEBI/RBI guidelines.

Whether the activity is an industrial or a service activity or a combination of both.

Whether there are any sectorial restrictions on the activity.

[FOREIGN DIRECT INVESTMENT (FDI) IN INDIA ]

G. TREND IN FDI FLOWS