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SETTING UP BUSINESS IN INDIA
FOREIGN DIRECT INVESTMENT IN INDIA
  • Government of India has permitted foreign investment in almost all sectors with a few exceptions, such as atomic energy & lottery business
  • In the permitted sectors, subject to sectoral caps, FDI may be via 2 routes:
    • Automatic route or
    • Government route (where prior approval of Government of India is required)
  • Equity inflow of and below USD 770 million – Approval from Sectoral department in consultation with Department of Industrial Policy & Promotion (DIPP)
  • Equity inflow of more than USD 770 million - Approval from Cabinet Committee on Economic Affairs
ENTRY OPTIONS
  • Foreign Investors can commence business in India as:
  • 1. An Indian Company:
    • Joint Venture as (i) Private Limited or (ii) Public Limited Company
    • Wholly owned subsidiary permissible in sectors where 100% FDI is permitted
  • 2. A Foreign Company:
    • Liaison Office to represent the parent company in India
    • Branch Office activities such as Export-Import of goods; research, consultancy etc.
    • Project Office activities as per contract to execute project
  • 3. Limited Liability Partnership:
    • Subject to provisions of LLP Act, 2008
    • FDI permitted under the automatic route in LLPs operating in sectors/activities where 100% FDI is allowed and there are no FDI-linked performance conditions
LOCATION IDENTIFICATION
  • 1. Availability of Land:
    • Land in India is a State subject
    • To set up a unit, Investors should get in touch with the respective State Industrial Corporations (IDCs) with business plans and desired land size
    • Applications are reviewed and processed based on merit
  • 2. Types of Land Allocation:
    • Special Economic Zones, Software Technology Parks, Sector-specific Clusters, Export Oriented Unit
    • National Investment and Manufacturing Zones (NIMZs)
    • Private Land - as per FDI policy and State-specific regulations/Conversion from agricultural to non-agricultural land
    • Industrial Parks/ Zones/ Areas – Country/Industry-specific or Multi product
  • For further queries, Connect with Invest India:
    The national level investment promotion & facilitation agency, provides facilitation services for obtaining information on land, arranging location visits for investors and connecting them to state IDC’s/SEZ/NIMZ’s etc. (http://www.investindia.gov.in/)
APPROVALS AND CONSTRUCTION - SETTING UP BUSINESS AS AN INDIAN COMPANY
  • Investing in India
  • 1. Registering with Registrar of Companies, India (Udyog Aadhar Memorandum / Industrial Entrepreneurship Memorandum/Industrial Licensing) – Single electronic form SPICe (Simplified Performa for Incorporating a Company electronically) has been recently introduced for registering private limited companies. The form provides five services in one e-Form – Director Identification Number, Name Reservation, Incorporation, PAN, TAN.
  • 2. Licenses and Permits:
    • Land: Application to respective State Infrastructure Corporation/ DIC/ SIDC/ SSIDC
    • Environment: Application to the Secretary, Ministry of Environment and Forests, New Delhi (Check Guidelines here)
    • Consent to Establish and Consent to Operate from individual Pollution Control Boards
    • Factory plan approval – Application to local bodies/Chief Inspector of factories
    • Power: Application to State Electricity Distribution Company for sanction of power supply for LT/ HT or Extra High Tension connection as applicable
    • Water: Application to SIDC /SIPB or Central Ground Water Commission depending on source
    • Fire: Provisional Fire Safety Approval from State Fire and Safety department; final approval by local State authority
    • Boiler NOC
    • Tax: VAT/ Service Tax/Professional Tax/Central Excise registration
    • Labour Compliances
FDI AT a glance
India’s FDI Growth – Make in India Impact
FDI Growth after Make In India
SECTORS UNDER AUTOMATIC ROUTE (WITH CONDITIONS)
UP TO 1OO%
Agriculture, Plantation, Mining – Metal & non-metal ores; Lignite & Coal, Manufacturing, Broadcasting Carriage Services (Teleports, DTH, Cable Networks, Mobile TV, HITS), Broadcasting Content Service ­– Up-linking of Non-‘News & Current Affairs’ TV Channels/ Down-linking of TV Channels, Airports – Greenfield; Brownfield, Airport Transport Services – Non-Scheduled; Helicopter/Seaplane Services, Ground Handling Services, Maintenance and Repair Organizations; Flying and Training Institutes; Technical Training Institutions, Construction Development, Industrial Parks – New and Existing, Trading – Wholesale; B2B e-commerce, Duty Free Shops, Railway Infrastructure, Asset Reconstruction Companies, Credit Information Companies, White Label ATM Operations, Other Financial services (includes NBFCs; via automatic route if regulated by any financial sector regulator/govt agencies, Pharma – Greenfield, Petroleum & Natural Gas ­– Exploration Activities of Oil and Natural Gas Fields
UP TO 49%
Petroleum Refining by PSUs, Infrastructure Company in the Securities Market, Commodity Exchanges, Insurance, Pension, Power Exchanges
SECTORS WHERE GOVERNMENT APPROVAL IS REQUIRED (as on July 8, 2O16)
UP TO 1OO%
(Government approval – up to 100%)Mining and mineral separation of Titanium bearing minerals and ores, Publishing/printing of scientific and technical magazines/specialty journals/periodicals, Publication of facsimile edition of foreign newspapers, Satellites - establishment and operation, Food product retail trading
UP TO 1OO%
Up to 100% (Government approval – beyond 74%)Pharma – Brownfield
UP TO 1OO%
Up to 100% (Government approval – beyond 49%)Defence, Air Transport Service - Scheduled and Regional Air Transport Service, Telecom Services, Trading - SBRT
UP TO 74%
Up to 74% (Government approval – beyond 49%)Banking - Private Sector, Private Security Agencies
UP TO 51%
Up to 51% (Government approval – up to 51%)Trading - MBRT
UP TO 49%
Up to 49% (Government approval – up to 49%)Broadcasting Content Service
  • FM Radio
  • Uplinking of news & current affairs TV Channels
Investment by Foreign Airlines
UP TO 26%
Up to 26% (Government approval – up to 26%)Print Media - Publication of Indian editions of foreign magazines dealing with news and current affairs, Print Media - Publishing of newspaper and periodicals dealing with news and current affairs
UP TO 2O%
Up to 20% (Government approval – up to 20%)Banking - Public Sector
Investing in India: Who Can Help

Invest India is the first port of call for potential investors. It is the official investment promotion and facilitation agency of the Government of India, mandated to facilitate investments into India.

Experts provide sector- and state-specific inputs, and handholding support to investors through the entire investment cycle, from pre-investment decision-making to aftercare.

The team assists with:
  • Market strategy
  • Business plan advisory
  • Location identification
  • Expediting regulatory approvals
  • Facilitating meetings with relevant government and corporate officials
  • Initiating remedial action on problems faced by investors
Invest India
WHO ARE THE STAKEHOLDERS OF INVEST INDIA?

Invest India is promoted by the Department of Industrial Policy & Promotion (DIPP), Ministry of Commerce and Industry (Government of India), the State Governments of India and the Federation of Indian Chambers of Commerce & Industry (FICCI).

DOES INVEST INDIA HAVE ANY FOREIGN ASSOCIATIONS?

Invest India has signed Memoranda of Understanding/Framework for Investment Cooperation with select Investment Promotion Agencies in select countries. These are:

  • JETRO (Japan),
  • Invest in America (USA),
  • UK Trade & Invest and UK India Business Council (UK),
  • Invitalia (Italy),
  • UBIFrance & Invest in France (France),
  • KOTRA (South Korea),
  • BOI Mauritius (Mauritius),
  • Czech Invest (Czech Republic),
  • Kaznex Invest (Republic of Kazakhstan),
  • Saudi Arabian General Investment Authority (Saudi Arabia).

Invest India is also working closely with Indian missions abroad, foreign missions in India and bilateral/ multilateral agencies.

DOES INVEST INDIA HAVE ANY INTERNATIONAL OFFICES OR REPRESENTATIVES?

Invest India functions out of its Headquarters in New Delhi, India. However, for any investment related queries you may get in touch with the commercial representatives of the Indian Embassies/Consulates in your country

DOES INVEST INDIA CHARGE FOR THE SERVICES?

No. Invest India is a Section 8, Not-For-Profit organisation. The services provided are completely free of charge. For more specific information, do fill out our investor query form

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