{"id":435,"date":"2015-09-25T11:49:34","date_gmt":"2015-09-25T06:19:34","guid":{"rendered":"http:\/\/carajput.com\/blog\/?p=435"},"modified":"2021-10-22T14:29:57","modified_gmt":"2021-10-22T08:59:57","slug":"significant-changes-introduced-in-foreign-director-investment-policy","status":"publish","type":"post","link":"https:\/\/carajput.com\/blog\/significant-changes-introduced-in-foreign-director-investment-policy\/","title":{"rendered":"CHANGES IN FDI POLICY"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_58 counter-hierarchy ez-toc-counter ez-toc-light-blue ez-toc-container-direction\">\n<p class=\"ez-toc-title\">Page Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-69e85aaedd241\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #000000;color:#000000\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #000000;color:#000000\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-69e85aaedd241\"  aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-1'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/carajput.com\/blog\/significant-changes-introduced-in-foreign-director-investment-policy\/#Significant_Changes_Introduced_In_Foreign_Director_Investment_Policy\" title=\"Significant Changes Introduced In\u00a0Foreign Director Investment Policy\u00a0\">Significant Changes Introduced In\u00a0Foreign Director Investment Policy\u00a0<\/a><ul class='ez-toc-list-level-2'><li class='ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/carajput.com\/blog\/significant-changes-introduced-in-foreign-director-investment-policy\/#The_significant_changes_introduced_in_FDI_Policy_edition_of_the_Circular_are\" title=\"The significant changes introduced in\u00a0FDI Policy\u00a0edition of the Circular are:\">The significant changes introduced in\u00a0FDI Policy\u00a0edition of the Circular are:<\/a><ul class='ez-toc-list-level-3'><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/carajput.com\/blog\/significant-changes-introduced-in-foreign-director-investment-policy\/#Exemption_of_construction-development_activities_in_the_education_sector_and_in_old-age_homes_from_the_general_conditionalitys_in_the_construction-development_sector\" title=\"Exemption of construction-development activities in the education sector and in old-age homes, from the general conditionality\u2019s in the construction-development sector:\">Exemption of construction-development activities in the education sector and in old-age homes, from the general conditionality\u2019s in the construction-development sector:<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/carajput.com\/blog\/significant-changes-introduced-in-foreign-director-investment-policy\/#Inclusion_of_%E2%80%98apiculture_under_controlled_conditions_under_the_agricultural_activities_permitted_for_FDI\" title=\"Inclusion of \u2018apiculture\u2019, under controlled conditions, under the agricultural activities permitted for FDI:\">Inclusion of \u2018apiculture\u2019, under controlled conditions, under the agricultural activities permitted for FDI:<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/carajput.com\/blog\/significant-changes-introduced-in-foreign-director-investment-policy\/#Inclusion_of_%E2%80%98basic_and_applied_R_D_on_bio-technology_pharmaceutical_scienceslife_sciences_as_an_%E2%80%98industrial_activity_under_industrial_parks\" title=\"Inclusion of \u2018basic and applied R&amp;D on bio-technology pharmaceutical sciences\/life sciences\u2019, as an \u2018industrial activity\u2019, under industrial parks:\">Inclusion of \u2018basic and applied R&amp;D on bio-technology pharmaceutical sciences\/life sciences\u2019, as an \u2018industrial activity\u2019, under industrial parks:<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/carajput.com\/blog\/significant-changes-introduced-in-foreign-director-investment-policy\/#Notification_of_the_revised_limit_of_26_for_foreign_investment_in_Terrestrial_Broadcasting_FM_radio\" title=\"Notification of the revised limit of 26% for foreign investment in Terrestrial Broadcasting\/ FM radio:\">Notification of the revised limit of 26% for foreign investment in Terrestrial Broadcasting\/ FM radio:<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/carajput.com\/blog\/significant-changes-introduced-in-foreign-director-investment-policy\/#Liberalizations_of_conversion_of_imported_capital_goodsmachinery_and_pre-operativepre-incorporation_expenses_to_equity_instruments\" title=\"Liberalizations of conversion of imported capital goods\/machinery and pre-operative\/pre-incorporation expenses to equity instruments:\">Liberalizations of conversion of imported capital goods\/machinery and pre-operative\/pre-incorporation expenses to equity instruments:<\/a><\/li><\/ul><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n<h1 style=\"text-align: justify;\"><span class=\"ez-toc-section\" id=\"Significant_Changes_Introduced_In_Foreign_Director_Investment_Policy\"><\/span><span style=\"color: #000080;\">Significant Changes Introduced In\u00a0Foreign Director Investment Policy\u00a0<\/span><span class=\"ez-toc-section-end\"><\/span><\/h1>\n<p><a href=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2016\/01\/31.png\" rel=\"attachment wp-att-1496\"><img loading=\"lazy\" decoding=\"async\" class=\"alignnone wp-image-1496\" src=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2016\/01\/31-300x163.png\" alt=\"31\" width=\"828\" height=\"450\" srcset=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2016\/01\/31-300x163.png 300w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2016\/01\/31-768x418.png 768w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2016\/01\/31.png 824w\" sizes=\"(max-width: 828px) 100vw, 828px\" \/><\/a>The consolidated <a href=\"https:\/\/www.caindelhiindia.com\/blog\/implications-ma-more-secure-on-making-fdi-in-india-inflows\/\">FDI <\/a>policy document is a single reference point for investors and regulators. The first such consolidation was released in March, 2010 after which it has been updated every six months. This\u2019 Circular 2 of 2011\u2019-is the fourth edition of the consolidated policy document.<\/p>\n<h2 style=\"text-align: justify;\"><span class=\"ez-toc-section\" id=\"The_significant_changes_introduced_in_FDI_Policy_edition_of_the_Circular_are\"><\/span><span style=\"color: #993300;\"><strong>The significant changes introduced in\u00a0<\/strong><strong>FDI Policy<\/strong><strong>\u00a0edition of the Circular are:<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<h3 style=\"text-align: justify;\"><span class=\"ez-toc-section\" id=\"Exemption_of_construction-development_activities_in_the_education_sector_and_in_old-age_homes_from_the_general_conditionalitys_in_the_construction-development_sector\"><\/span><span style=\"color: #993300;\"><strong>Exemption of construction-development activities in the education sector and in old-age homes, from the general conditionality\u2019s in the construction-development sector:<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p style=\"text-align: justify;\">FDI into construction development activities in the education sector and in respect of old-age homes has been exempted from the conditionality imposed on FDI in the construction development sector in general i.e. minimum area and built-up area requirement; minimum capitalization requirement; and lock-in period.<\/p>\n<p style=\"text-align: justify;\">This conditionality\u2019s perhaps posed a constraint to FDI coming into these areas since educational institutions like schools, colleges, universities etc.<\/p>\n<p style=\"text-align: justify;\">As well as old-age homes have their own special requirements which do not necessarily fit these conditionalities. This step should augment the educational infrastructure in the country and bring it up to global standards.<\/p>\n<p style=\"text-align: justify;\">Similarly, with growing urbanization, there is an increasing demand for old-age homes to cater to the needs of senior citizens.<\/p>\n<p style=\"text-align: justify;\">The physical infrastructure in this area also is short of the requirements. Hence, it has also been decided to exempt old-age homes also from the general conditionality\u2019s applicable to the construction development sector.<\/p>\n<p>More read:<\/p>\n<p><a href=\"https:\/\/carajput.com\/blog\/advantage-of-foreign-inward-remittance-certification-firc\/\">advantage-of-foreign-inward-remittance-certification-firc<\/a><\/p>\n<p><a href=\"https:\/\/carajput.com\/blog\/fema-compliance-for-fdi-in-equity-share-in-india\/\">Fema Compliance for FDI in Equity Share in India<\/a><\/p>\n<p><a href=\"https:\/\/carajput.com\/blog\/rbi-introduced-mandatory-fdi-reporting-through-single-master-form-smf-2\/\">FDI reporting through single master<\/a><\/p>\n<h3 style=\"text-align: justify;\"><span class=\"ez-toc-section\" id=\"Inclusion_of_%E2%80%98apiculture_under_controlled_conditions_under_the_agricultural_activities_permitted_for_FDI\"><\/span><span style=\"color: #993300;\"><strong>Inclusion of \u2018apiculture\u2019, under controlled conditions, under the agricultural activities permitted for FDI:<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p style=\"text-align: justify;\">FDI has been allowed up to 100% under the automatic route in apiculture under controlled conditions.<\/p>\n<p style=\"text-align: justify;\">Apiculture is an important agro-based industry and has the potential of bringing in high economic returns with comparatively low levels of investment.<\/p>\n<p style=\"text-align: justify;\">Being a decentralized activity, it does not bring pressure on land and can flourish as a household activity in villages.<\/p>\n<p style=\"text-align: justify;\">The activity has the potential of large scale income generation with some infusion of capital and technology. This liberalization would not only provide the desired thrust to the sector but would also bring in international best practices to upgrade the product and the methods of production.<\/p>\n<h3 style=\"text-align: justify;\"><span class=\"ez-toc-section\" id=\"Inclusion_of_%E2%80%98basic_and_applied_R_D_on_bio-technology_pharmaceutical_scienceslife_sciences_as_an_%E2%80%98industrial_activity_under_industrial_parks\"><\/span><span style=\"color: #993300;\"><strong>Inclusion of \u2018basic and applied R&amp;D on bio-technology pharmaceutical sciences\/life sciences\u2019, as an \u2018industrial activity\u2019, under industrial parks:<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p style=\"text-align: justify;\">FDI up to 100%, under the automatic route, is permitted in existing and new industrial parks. Under the existing regime, industrial parks cover specified sectors.<\/p>\n<p style=\"text-align: justify;\">The coverage has been expanded to specifically include research and development in bio-technology, pharmaceutical and life sciences, given the urgent need to augment research and development infrastructure in these areas as also expand the production facilities.<\/p>\n<h3 style=\"text-align: justify;\"><span class=\"ez-toc-section\" id=\"Notification_of_the_revised_limit_of_26_for_foreign_investment_in_Terrestrial_Broadcasting_FM_radio\"><\/span><span style=\"color: #993300;\"><strong>Notification of the revised limit of 26% for foreign investment in Terrestrial Broadcasting\/ FM radio:<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p style=\"text-align: justify;\">The Foreign Investment limit for FM radio has been enhanced to 26% from the earlier 20%. This change ensures conformity of the foreign investment limit in this sector with other similar activities in the Information &amp; Broadcasting sector.<\/p>\n<h3 style=\"text-align: justify;\"><span class=\"ez-toc-section\" id=\"Liberalizations_of_conversion_of_imported_capital_goodsmachinery_and_pre-operativepre-incorporation_expenses_to_equity_instruments\"><\/span><span style=\"color: #993300;\"><strong>Liberalizations of conversion of imported capital goods\/machinery and pre-operative\/pre-incorporation expenses to equity instruments:<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p style=\"text-align: justify;\">Conversion of imported capital goods\/machinery and pre-operative\/pre-incorporation expenses to equity instruments had been permitted in the last Circular on\u00a0FDI Policy, effective 1 April, 2011.<\/p>\n<p style=\"text-align: justify;\">It was stipulated that such conversions must be made within a period of 180 days of the date of shipment of capital goods\/machinery or retention of advance against equity and that payments made through third parties would not be allowed.<\/p>\n<p style=\"text-align: justify;\">This conveyed the sense that the onus of conversion is on the investor with no allowance for the FIPB process involved.<\/p>\n<p style=\"text-align: justify;\">This has been clarified through the present amendment, under which the time limit for making applications for such conversions will be 180 days.<\/p>\n<p style=\"text-align: justify;\">Further, payments for pre-operative\/incorporation expenses can now be made directly by the foreign investor to the company or through a bank account, opened by the Foreign Investors, as provided under the FEMA.<\/p>\n<p style=\"text-align: justify;\">The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific<\/p>\n<p style=\"text-align: justify;\">circumstances; Hope the information will assist you in your Professional\u00a0endeavors. For query or help, contact:\u00a0<a href=\"mailto:singh@carajput.com\">singh@carajput.com<\/a>\u00a0or call at 95555554890<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Significant Changes Introduced In\u00a0Foreign Director Investment Policy\u00a0 The consolidated FDI policy document is a single reference point for investors and regulators. The first such consolidation was released in March, 2010 after which it has been updated every six months. This\u2019 Circular 2 of 2011\u2019-is the fourth edition of the consolidated policy document. The significant changes &hellip;<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[43],"tags":[3216,3215,3214,3212,3211,548,3213],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/posts\/435"}],"collection":[{"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/comments?post=435"}],"version-history":[{"count":5,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/posts\/435\/revisions"}],"predecessor-version":[{"id":17981,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/posts\/435\/revisions\/17981"}],"wp:attachment":[{"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/media?parent=435"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/categories?post=435"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/tags?post=435"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}