FDI Proposals and Expedited Clearance
The Indian government has identified 40 sub-sectors for expedited clearance of Foreign Direct Investment (FDI) proposals from China and other countries sharing land borders with India. This decision ensures processing within 60 days.
Procedural Guidelines for FDI Proposals
- Applies to countries: China, Pakistan, Bangladesh, Nepal, Bhutan, Myanmar, and Afghanistan.
- Majority shareholding and control must remain with resident Indian citizens or resident Indian entities owned and controlled by Indians.
Sub-Sectors Identified
- Capital Goods Manufacturing
- Electronic Capital Goods and Components
- Polysilicon and Ingot Wafers
- Advanced Battery Components
- Rare Earth Permanent Magnets and Processing
Examples of Sub-Sector Activities
- Manufacturing of insulation items
- Castings and forgings for power plants
- Machine tools
- Display components (plasma, polymer, LCD, LED)
- Camera modules and electronic capacitors
- Speakers and microphones for ICT products
- Li-ion batteries and wearables
- Rare earth metal, alloy, and magnet making
Reporting Guidelines for Investments
Guidelines under the Foreign Exchange Management (Mode of Payment and Reporting of Non-debt Instruments) Regulations, 2019, with information accessible by the Reserve Bank of India (RBI).
- Responsibility of reporting falls on the Indian investee firm.
- Report to the Department for Promotion of Industry and Internal Trade (DPIIT).
- Reporting must occur before inward remittance of foreign capital or prior to transaction execution.
Investor Reporting Requirements
- Shareholding pattern
- Beneficial owners
- Organization and group structure
- Promoters, board composition, and key managerial personnel
- Citizenship status and control rights
Indian Investee Entity Disclosures
- Incorporation details
- Shareholding pattern
- Existing or proposed shareholding by a land-bordering country entity
