Industry experts say that the government needs to further relax FDI norms to attract investors to the sector.
At the same time, Indian companies with a majority foreign shareholding could find it difficult to make 'downstream' investments since the new guidelines do not distinguish between different forms of capital and treats them as FDI. So, a company with high non-FDI foreign capital was considered an Indian entity. Now, they will be considered foreign-owned and their downstream investments will have to follow sectoral restrictions.
'Indian equity valuations, although not very expensive, are not cheap either.'
He said with an aim to make the FDI policy user friendly, all prior regulations and guidelines have been consolidated into a comprehensive document.
With the reality of coalition politics staring the BJP in its face, this was inevitable, points out Ramesh Menon.
Mamata Banerjee, Chief minister of West Bengal and an important ally of the UPA government has given go-ahead to the Foreign Direct Investment in the aviation sector, according to a source in her government in Kolkata.
It also plans to open 5 new centres across India in addition to its two fulfilment centres (FCs) in Mumbai and Bangalore.
Foreign direct investment (FDI) inflows into India rose 54.8 per cent in November to $1.64 billion compared with $1.06 billion a year ago, a government statement
Under the present dispensation, a foreign player who entered India before January 12, 2005 has to take government approval and 'demonstrate' that fresh investment in the same field would not affect interest of his domestic joint venture partner.
India currently allows up to 100 per cent FDI in this sector, but the health ministry has moved a draft note for the cabinet to ban foreign investment in this sector
The campaign will be launched in global as well as domestic markets across the media.
FDI inflows into the country have been declining over the past two years despite policy easing in about a dozen sectors.
Foreign investment in news channels includes FDI, FII, External Commercial Borrowings and investment by NRIs.
In a reversal of its recommendations made in April 2008, the Telecom Regulatory Authority of India whittled the increase it had suggested then in the foreign direct investment cap for companies set up to uplink television news channels, as well as in FM radio.
The sharp correction in the Indian markets from their peak levels has made valuations attractive, say analysts, who advise buying selectively, but only from a long-term perspective. Fifty-six of the Nifty 100 stocks, according to Mahesh Nandurkar, managing director at Jefferies, now trade below the 10-year historical averages, including stocks in financial, select auto, and pharma sectors. "Valuation (one-year forward consensus price-to-earnings, PE) has declined 25 per cent from October 2021 peak, almost matching the 33 per cent price-earnings contraction during the 2011 tightening cycle when repo rates went up by 375 basis points (bps) versus 250 bps this cycle.
While raising the foreign direct investment limit to 100 per cent in the single-brand retail segment six months earlier, the government asked retail chains with over 51 per cent foreign investment to source at least 30 per cent of the value of products sold in the country from Indian small/village/cottage industries, artisans and craftsmen.
The government has imposed a service tax of 10.3 per cent on the gross value of tickets of all classes on the domestic flights and economy class on international routes.
The Centre on Thursday cleared 14 Foreign Direct Investment proposals worth Rs 1,257 crore, including those of Mauritius-based Essar Telecom Holdings Ltd and US-based Goldman Sachs Asset Management. The proposals include induction of foreign equity worth Rs 500 crore by Essar Telecom Holdings and Rs 200 crore from GSAM. The investment proposals were cleared by Finance Minister P Chidambaram on the recommendations of the Foreign Investment Promotion Board.
Goyal also said that current account deficit is likely to be 2.5 per cent of GDP this year.
All foreign equity investments in stock exchanges prior to their listings will be treated as foreign direct investment, where 26 per cent is expected to be the cap.
Foreign direct investment (FDI) in India has increased by 16 per cent year-on-year to $27.1 billion during April-August this year, the Commerce and Industry Ministry said on Tuesday. During April-August last year, India had received FDI worth $23.35 billion. The ministry said that the total FDI, which includes reinvested earnings, grew by 13 per cent to $35.73 billion.
The government on Friday hiked foreign investment ceiling in private banks from 49 to 74 per cent and allowed foreign banks to set up subsidiaries in the country.
Various corporate bodies from US and UK had cautioned that such tax proposals could dent India's image as an investment hotspot.
Finance Minister Pranab Mukherjee on Friday said the government is considering further liberalisation of the country's foreign direct investment policy for attracting investment in the infrastructure sector.
The government has last month significantly liberalised the FDI regime, putting most of the sectors on the automatic route
India received $2.21 billion in foreign direct investment in February, showing an annual growth of 74 per cent, taking cumulative inflows to $28.40 billion for the April-February period of the last fiscal.
The government on Friday said it has started implementing liberal FDI rules under which proposals up to Rs 1,200 crore (Rs 12 billion) foreign equity would be cleared by the Finance Minister without seeking approval of the Cabinet Committee on Economic Affairs.
While the cumulative FDI inflows of $25.35 billion for April-February 2008-09 were higher than the $20.13 billion a year ago, the country has been witnessing a steep fall in foreign investments since October 2008, according to official figures. In February 2008, the foreign investment was $5.67 billion.
A new era of Indian equity market outperformance compared to China "appears to be dawning", according to Morgan Stanley. The firm has upgraded India to overweight in its Asia Pacific-excluding Japan (APxJ) list, making it their most preferred market not only in the region but also in the global emerging market (GEM) pack. India now holds the top position in this category, with an overweight of 75 basis points, a significant increase from nil previously.
China's FDI growth saw ups and downs in the first 11 months of 2015.
The stage is set for foreign investors to invest in India's commodity exchanges. The Manmohan Singh Cabinet will give formal approval this week on allowing foreign investment in commodity exchanges.
Allaying investor fears over the levy of long-term capital gains tax on share transfer in unlisted companies, the government on Friday said the move is only to target 'khoka' companies, and 'genuine investments' in start-ups and through FDI will be exempt.
After nearly five months wait, the government on Friday cleared UK's BP Plc buying 30 per cent stake in most of Reliance Industries' oil and gas blocks, including the showpiece KG-D6 gas fields, for $7.2 billion.
The Union ministry of consumer affairs has given the finishing touches to the policy framework to allow foreign direct investment and foreign institutional investment in India's national commodity exchanges.
Ananjan Mitter, partner at ALMT Legal, a law firm, has represented Air Charter Service in the venture's application to the Foreign Investment Promotion Board, a key wing in the finance ministry that vets foreign direct investments proposals of companies.
Bid to plug loopholes that surfaced in Hutch Essar case.
There is a high possibility that one or two Indian airlines might not survive the rough weather.
In July 2011, the country had received foreign investment worth $1.10 billion.
The new foreign direct investment guidelines may be revised with respect to the banking sector to avoid an adverse fallout for Indian banks with majority foreign equity.
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