Foreign Direct Investment
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FIPB Clearances:
In January 2011, the Union Ministry of Finance on
recommendations of the FIPB, ratified 19 FDI
proposals amounting to Rs 4,340.77 crore.
Major chunk of the proposed investment through
FDI came from Tata Steels' proposal for issue of
warrants worth Rs 1,100 crore as part of its fund
mobilisation programme.
Among other proposals, Mumbai based Future
Ventures India received approval to allot shares
worth Rs 300 crore to foreign institutional investors
and non-resident Indians under its portfolio
investment scheme while Karur Vysya Bank has
been permitted to issue partly paid-up shares worth
Rs 107.50 crore.
Also, Japan based Yorozu Corporation received
government nod for setting up a JV company for
the production of various automotive parts with its
contribution of Rs 140 crore. EADS Deutschland
GmbH and LT have been permitted to bring in
foreign equity up to 26 per cent in a proposed JV to
undertake manufacturing, distribution and
marketing of defence-related products such as
electronic warfare and military avionics.
Wireless Broadband Business Services (Delhi) was
also given a go-ahead for inducting foreign equity
worth Rs 362.78 crore to carry out Internet and
broadband services.
The government deferred its decision on 16 FDI
proposals and rejected two. The deferred proposals
include those of Reliance Broadcast Network and
Essar Capital Holding. Among the rejected
proposals was that of B4U Television Network for
induction of foreign equity to carry out business of
up-linking a non-news and current affairs channel.
Policy Developments:
Government to relax FDI in agriculture
The Union Ministry of Agriculture and the
Department of Land Resources under the Ministry
of Rural Development have given in-principle approval to a proposal of the DIPP to invite FDI for
developing non-arable land through better
technology into fertile and cultivable land.
At present, FDI in agriculture is not permissible,
barring allied sectors like horticulture, floriculture,
pisciculture, animal husbandry, aquaculture and
development of seeds, vegetables and mushrooms
under controlled conditions.
The proposal mooted by DIPP aims at handling the
problem of limited arable land and food shortage in
the country. Under this proposal to be classified as
investment in land and agriculture, a foreign
company could invest through an Indian company
under a JV or technical tie-up for imparting the
necessary technology for converting waste land into
fertile land. The investments could be in drylands
like deserts or marshy land or salty and barren land.
The Department of Agriculture has made following
suggestions to DIPP.
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- The nature of technology to be used, its proven
track record in other countries and time-line of
the project will be essential before drawing up
the final blueprint for the proposal.
- In case of land owned by a farmer or individual
or an entity, he or it should be treated as a
stakeholder in the final proposal or venture.
- To examine the ownership issues, as to whether
any public sector undertaking, through the
Department of Land Resources or agriculture or
relevant state government, may be made a
partner in the project to take care of public
welfare.
- The DIPP before according approval should look
into the form of FDI. Whether it is through a
new company or existing company and whether
the operation of the existing company
supplements agriculture is to be looked into
before inviting FDI.
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The Department of Land Resources will be mapping
such non-fertile land, which could be given on lease
to a company for inviting FDI.
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