Investment Opportunities in India
Protection of Foreign Investment
- Bilateral Investment Conventions Signed By India
- Bilateral investment treaties with the United Kingdom, France, Germany, Canada, Malaysia, and Mauritius. UNCTAD allows you to visualize the list of conventions signed by India.
- International Controversies Registered By UNCTAD
- Foreign investors frequently complain about a lack of "sanctity of contracts." UNCTAD offers a database listing disagreements and the countries involved.
- Organizations Offering Their Assistance in Case of Disagreement
ICCWBO , International court of arbitration, International chamber of commerce
ICSID , International Center for settlement of Investment Disputes
United States Council for international Business
- Member of the Multilateral Investment Guarantee Agency
Country Comparison For the Protection of Investors
|India||South Asia||United States||Germany|
|Index of Transaction Transparency*||7.0||4.4||7.0||5.0|
|Index of Manager’s Responsibility**||4.0||4.4||9.0||5.0|
|Index of Shareholders’ Power***||7.0||6.3||9.0||5.0|
|Index of Investor Protection****||6.0||5.0||8.3||5.0|
Source: Doing Business
Note: *The Greater the Index, the More Transparent the Conditions of Transactions. **The Greater the Index, the More the Manager is Personally Responsible. *** The Greater the Index, the Easier it Will Be For Shareholders to Take Legal Action. **** The Greater the Index, the Higher the Level of Investor Protection.
Procedures Relative to Foreign Investment
- Freedom of Establishment
- Various approvals and clearances are required such as permission for land use in case the factory is located outside an industrial area; environmental site approval; registration under State Sales Tax Act and Central and State Excise Acts; and consent under Water and Air Pollution Control Acts.
- Acquisition of Holdings
Acquisitions by private arrangement would be contractual agreements between the parties and would take the form of: share acquisitions; asset transfers; or spin off or slump sale.
- Obligation to Declare
- Mergers and acquisitions are generally governed by the Companies Act, 1956 and the sector-specific law.
In the case of listed companies, provisions of Listing Agreements with the stock exchange SEBI (Disclosure & Investor Protection Guidelines)-2000, SEBI (Substantial Acquisition of Shares and Takeovers) Regulations- 1997 must be complied with. If a merger has cross-border aspects, the parties must comply with among others the foreign direct investment policy of the government, the Foreign Exchange Management.
- Competent Organization For the Declaration
Department of Industrial Policy and Promotion
- Requests For Specific Authorizations
- Environment clearance from the Ministry of Environment and Forest for investment of foreign capital in fields like petrochemicals complexes, petroleum refineries, cement thermal power plants, bulk drugs etc.
Office Real Estate and Land Ownership
- Possible Temporary Solutions
- Offices, showrooms, warehouses, industrial premises. Visit the website Offices Mumbai for further information.
- The Possibility of Buying Land and Industrial and Commercial Buildings
- Foreign companies can buy land and building space for business purpose.
- Risk of Expropriation
- There have been few instances of direct expropriation since the 1970s (Coca Cola in seventies and Dabhol Power).
- Forms of Aid
- Several measures and incentives, to attract investments into the country: Tax holiday, tax concessions, and import of capital goods at concessional customs duty, Special Economic Zones (SEZs), bilateral investment protection agreements with investing countries; etc.
- Privileged Domains
- Power, ports, highways, electronics and software, scientific R&D, manufacturing of energy-saving, environmental-protection and pollution-control equipment.
- Privileged Geographical Zones
- Consult the list of the Special Economic Zones (SEZ) in India.
- Free Zones
- Organizations Which Finance
Industrial Development Bank of India (IDBI)
Industrial Investment Bank of India Limited (IIBI)
Power Finance Corporation Limited
Credit Guarantee Fund Trust for Small Industries (CGTSI)
Export-Import Bank of India
Indian Renewable Energy Development Agency Limited (IREDA)
Asian Development Bank
The World Bank
Multilateral Investment Guarantee Agency
International finance Corporation
- The Key Sectors of the National Economy
India is the world's fourth agricultural power. Agriculture contributes 20% to the GDP and employs almost two-third of the active population.
India is the fourth largest producer of coal in the world. In the manufacturing industry, textile plays a predominant role. Chemical industry is the second largest industrial sector (12% of the GDP).New technologies (software) sector is also expanding. The telecommunication sector is also in full boom.
- High Potential Sectors
- Airport & Ground Handling, Computer and Peripherals, Education Services, Electric Power & Transmission Equipment, Food Processing, Machine Tools, Medical Equipment, Mining & Mineral Processing Equipment, Oil & Gas Field Machinery, Pollution Control Equipment, Safety & Security, Telecommunications Equipment, Textile Machinery, Water and Sustainable energies.
- Privatization Programs
- India has been privatizing its large, mostly non-profitable public sector: telecommunications, public infrastructure, airways, ports, etc.
The Department of Disinvestments looks after the disinvestment privatization program in the country.
- Tenders, Projects and Public Procurement
Tenders Info, Tenders in India
Asian Development Bank, Procurement Plans in Asia
DgMarket, Tenders Worldwide
Sectors Where Investment Opportunities Are Fewer
- Monopolistic Sectors
- Railways, power generation & distribution (though it is being slowly privatized now), life and medical insurance (though it is also slowly opening up), manufacturing of arms, explosives, atomic energy and aerospace.
- Sectors in Decline
Finding Assistance For Further Information
- Investment Aid Agency
Foreign Investment Promotion Board (FIPB)
Foreign Investment Implementation Authority (FIIA)
Department of Industrial Policy & Promotion
India Brand Equity Foundation (IBEF)
- Other Useful Resources
Investment Commission of India
Ministry of Finance
Ministry of Commerce
National Center for Trade Information
- Doing Business Guides
The Lexmundi guide “Doing Business” about India
The Deloitte ‘International Tax and Business Guide’ about India
India Commercial Guide 2010 - Buy USA
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The guide addresses practical aspects of doing business in India like access to reliable information and who to contact for personal and business assistance while in Bengaluru, India.
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