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Foreign
Direct Investment in retail
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03. INVESTMENT UPDATE |
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Foreign
Direct Investment in retail |
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Government,
vide Press Note 3 (2006 series) dated 10/2/2006 has, allowed
FDI upto 51%, with prior government approval, in the retail
trade of 'single brand' products subject to the conditions contained
in it.
FDI policy, including the sectoral equity
caps and associated procedures, is revised on a continuous basis.
FDI is a means to supplement and complement domestic investment
for achieving a higher level of economic development, providing
opportunities for technological upgradation, access to global
managerial skills and practices, optimal utilisation of human
and natural resources, making Indian industry internationally
competitive, opening up export markets, providing backward and
forward linkages and access to international quality goods and
services.
This was stated by Dr. Ashwani Kumar, Minister of State for
Industry, in a written reply in the Lok Sabha. |
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RBI eases investment guidelines |
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The Reserve Bank of
India (RBI) has changes its guidelines on individual investment. The
resident individuals now have the freedom to invest in any listed
foreign company. |
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Individuals no longer
face the restriction of investing only in a listed foreign company
that has at least a 10 per cent stake in a listed Indian company.
"The requirement of 10 per cent reciprocal shareholding in listed
Indian companies by overseas companies has been dispensed with," the
RBI said in a circular to banks. The individual investments will |
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form a part of the overall
remittance limit of $50,000 per financial year for both current and
capital account transactions, being raised from $25,000 per calendar
year.
Remittances by resident individuals towards gifts and donations have
now been included in the $50,000 limit. Individuals will have to make
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declaration for all remittances
made and also be required to disclose the source of funds.
Foreign financial products, including mutual funds, can now be marketed
in India by Indian as well as foreign banks, including those not having
an operational presence in India, with the prior approval of the RBI. |
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$350b investment in Infrastructure
in 11th Plan |
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The Finance Minister
announced the constitution of a high-powered committee
under the chairmanship of Deepak Parekh to examine critical
issues concerning private investment in infrastructure.
The Planning Commission has set a target of $350 billion
of investment in infrastructure during the 11th Five Year
plan, the Minister said.
India Infrastructure Finance Company Ltd will soon be
entering the market to raise funds, the Minster said.
The government intends to provide a sovereign guarantee
of Rs 10,000 crore annually. A total of 13 projects have
already been approved under the PPP route.
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INDIA GROWTH INDICATORS |
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1. GDP growth
has exceeded 8% during the last 3 years, being
over 9% in the first half of this year. Our industrial
production has grown over 10% so far in the current
year and manufacturing growth has clocked a record
11.2%.
2. We have
foreign exchange reserves of more than $ 175 billion.
3. Export
growth is averaging 25% per annum over the last
three years. India crossed the $ 100 billion threshold
last year, and during the current year it is poised
to export $ 125 billion worth of goods and $ 75
billion worth of services.
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4. The imports
too have risen commensurately. If the import and
exports of goods and services are combined, India's
economic engagement with the world this year will
exceed $ 450 billion.
5. FDI equity inflows along this fiscal
are expected to cross $ 11 billion, more than
double the equity inflows of $5.5 billion last
year. Of the $ 53 billion in FDI (equity + other
components) up to 2006 (September) since 1991,
when the country began its economic liberalisation,
a full one-third, i.e., around $18 billion, has
come in the last two-and-a half years.
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6. In mergers
and acquisitions, Indian companies are showing
the potential to redefine equations in the global
market place. And increasingly, India is being
viewed as a source for R&D activities.
7. According
to market research firm Synovate, the top end
of over 7 lakh people out of India's population
of over one billion is estimated to have individual
liquid wealth of about $1,00,000 which is likely
to go up to $1.1 million by 2009.
8. Overall
internet access in Asia has gone by 30 per cent
in 2005 over 1997, with access levels in India
having gone up 132 per cent during the same period.
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Govt clears 18 FDI proposals |
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18 applications involving
a total of 64.66 crore FDI inflow have been cleared by
the government. Among those cleared is Swiss firm Nuance
Group's that plans to set up duty-free shops in airports
and Nokia Siemens Networks' proposal to make investment
for manufacturing telecom equipment, while Nuance Group
plans to invest Rs 25 crore to manage duty-free shops
in airports, Nokia Siemens Networks would make an investment
of Rs12.42 crore in manufacturing and marketing of telecom
equipment.
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The proposals were cleared by Finance Minister
P Chidambaram on the recommendations of Foreign
Investment Promotion Board, an official statement
said. Nuance Group's proposal is to undertake
operation and management of duty-free shops, food
and beverage
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outlets at airports in Mumbai, Bangalore, Hyderabad
and other places. Besides, Italian company Ermenegildo
Zegna Holditalia would set up a single brand 'zegma'
retail stores in India. The proposal involves
FDI of Rs 1.53 crore.
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Parry Murray & Company of UK would set up a subsidiary
in Chennai for trading of textile and other products
for home furnishing sourced from third parties.
The proposal involves FDI of Rs 0.2 crore.
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FDI limit 74 percent |
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foreign direct investment proposals worth Rs250 crore
recommended by the Foreign Investment Promotion Board
at its meeting on October 20 have been approved by Finance
Minister P Chidambaram.
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The Cabinet has endorsed hiking the FDI limit
to 74% sans the tough clauses on compulsorily
having an Indian as a CEO. However, a final decision
on the issue will be taken after a group headed
by the Cabinet
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secretary redraws the revised guidelines, especially
for remote access to fixed-line networks (PSTN).
The government has, therefore, decided to give
three months' time till March 31, 2007, to
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telecom operators for complying with the foreign
direct investment (FDI) norms. Operators having
up to 74% FDI were earlier required to abide by
the guidelines by January 2, 2007.
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