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8/9/2019 India Eco Summit
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Dr. Ajay DuaDr. Ajay DuaSecretarySecretary
Department of Industrial Policy & PromotionDepartment of Industrial Policy & PromotionMinistry of Commerce & IndustryMinistry of Commerce & Industry
Government of IndiaGovernment of India
22t!t!"ovem#er 2$$%"ovem#er 2$$%
e#site'e#site' (((.dipp.)ov.in(((.dipp.)ov.in
*orei)n Direct Investment
in India
http://www.dipp.gov.in/http://www.dipp.gov.in/http://www.dipp.gov.in/8/9/2019 India Eco Summit
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Indian +conomy , An -vervie(
+conomic Performance Sustained economic )ro(t!
Avera)e last 1$ years .%/ 2$$0$% ./
*orecast up to 2$$$3 43.$/ *orecast till 2$%$ , Goldman Sac!s % / p.a.
Services s!are in GDP over %$/ 5%2.0/ s!are in GDP in2$$0$%6
Manufacturin) sector )re( at ./ in 2$$0$% 513.0/s!are in GDP in 2$$0$%6
*orei)n 7rade Merc!andise e8ports )re( #y 2%/ in 2$$0$%9 no(
:S;$ #illion Imports )re( #y
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+conomic ?eforms *iscal
?ationali@ation of ta8 structure , #ot!direct and indirect Pro)ressive reduction in pea= rates
Pea= Customs duty reduced to 1%/ Corporate 7a8 reduced to
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+conomic ?eforms' Bi#eralisation of Investment &7rade Policies
Industrial Bicensin) Pro)ressive movement to(ards delicensin) and
dere)ulation Bicensin) limited to only % sectors 5security9
pu#lic !ealt! & safety considerations6
*orei)n Investment
Pro)ressive openin) of economy to *DI Portfolio investment re)ime li#eralised
Bi#eral policy on tec!nolo)y colla#oration
7rade Policy Most items on -pen General Bicense9
uantitative ?estrictions lifted
*orei)n 7rade Policy see=s to dou#le Indiass!are in )lo#al merc!andise trade in % years
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+conomic ?eforms' +8c!an)e Control & 7a8ation
+8c!an)e Control All investments are on repatriation #asis
-ri)inal investment9 profits and dividend can#e freely repatriated
*orei)n investor can acEuire immova#leproperty incidental to or reEuired for t!eir
activity ?upee made fully converti#le on current account
7a8ation Companies incorporated in India treated as
Indian companies for ta8ation
Convention on Avoidance of Dou#le 7a8ation(it! % countries
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Manufacturin) Competitiveness FMade in India
Second most attractive destination formanufacturin) A7earneys *DI Confidence Inde8 2$$0
Indian industry )lo#ally competitive in a (ide ran)eof manufacturin) s=illintensive products' Apparels9 electrical and electronics componentsH
speciality c!emicalsH p!armaceuticalsH etc.
Automotive components' Major M"Cs & t!eir -+Mssourcin) !i)!Euality components from India olvo9 GM9 G+9 C!rysler9 *ord9 7oyota9 :nilever9
Cliariant9 Cummins9 Delp!i
Indian companies no( !avin) manufacturin)presence in many countries -ver %%/ of approved out(ard investment #y India
companies in manufacturin) activities
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+volution of *DI Policy
Pre 11
11
13
2$$$
2$$$$%
Allowed selectively upto 40%
Up to 74/51/50% in 112 sectors under theAutomatic Route 100% in some sectors
Up to 100% under Automatic Route in all sectors excepta small neative list
!ore sectors opened " #$uity caps raised in many other sectorsrocedures simpli&ed
'() olicy *i+erali,ation
'() up to 51% allowed under theAutomatic route in -5 riority
sectors
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Investin) in India , +ntry ?outes
Automatic Routerior ermission
.')
)nvestin in )ndia
General Ruleo prior permission
re$uired)norm Reserve an3within -0 days oinow/issue o shares
By Exceptionrior overnment
Approval needed6(ecision enerallywithin 48 wee3s
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*DI Policy Initiatives ' 2$$$2$$0
"e( sectors opened to *DI Defence production9 Insurance9 print media upto 2/
Development of inte)rated to(ns!ips up to 1$$/ ecommerce9 ISP (it! out )ate(ay9 voice mail9
electronic mail9 tea plantation 1$$/ su#ject to2/ divestment in % years
*DI eEuity limits raised Private sector #an=s raised from 0/ to 30/ Dru)s and p!armaceuticals from 30/ to 1$$/ Advertisin) from 30/ to 1$$/ Private sector refineries9 Petroleum product
mar=etin)9 e8ploration 9 petroleum productpipelines , 30/ to 1$$/
Procedural simplification Issue of s!ares a)ainst royalty paya#le allo(ed
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?ecentInitiatives ' une 2$$0 on(ard
*DI in domestic airlines increased from 0$/ to 0/.Automatic route allo(ed
*DI up to 1$$/ allo(ed under t!e automatic route indevelopment of to(ns!ips9 !ousin)9 #uilt upinfrastructure and construction development projects
*orei)n investment limit in 7elecom services increasedto 30/
*DI and portfolio investment up to 2$/ allo(ed in *M>roadcastin). Jit!erto only Portfolio investment (asallo(ed.
7ransfer of s!ares allo(ed on automatic route in mostcases
*res! )uidelines for investment (it! previous joint
ventures A 7- 57?IPs6 IP? re)ime compliant in position since
2$$% , Patents Act amended to provide for productpatent in p!arma and a)roc!emicals also.
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+8tant Policy on *DI
*DI up to 1$$/ allo(ed under t!e FAutomatic
?oute in all activities e8cept for Sectors attractin) compulsory licensin)
7ransfer of s!ares to nonresidents 5forei)ninvestors6
In *inancial Services9 or
!ere t!e S+>I 7a=eovers ?e)ulation is attracted
Investor !avin) e8istin) venture in same field
Sector specific eEuityKroute limit prescri#ed undersectoral policy
Investments made #y forei)n investors are )iventreatment similar to domestic investors
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Main Sectors (it! *DI +EuityK?oute Bimit
FDI equity limit-Automatic route
Insurance , 2/
Domestic airlines , 0/
7elecom services *orei)n
eEuity 30/ Private sector #an=s 30/
Minin) of diamonds andprecious stones 30/
+8ploration and minin) of coaland li)nite for captive
consumption 30/
FDI requiring priorapproval
Defence production , 2/
*M >roadcastin) forei)neEuity 2$/
"e(s and current affairs 2/ >roadcastin) ca#le9 D7J9 up
lin=in) , forei)n eEuity 0/
7radin) (!olesale cas! andcarry9 e8port tradin)9 etc.91$$/
7ea plantation , 1$$/
Development of airports 1$$/
Courier services 1$$/
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*orei)n 7ec!nolo)y Colla#oration Policy
*orei)n tec!nolo)y a)reements also allo(edunder Automatic route' Bumpsum fees not e8ceedin) :S;2 Million
?oyalty L %/ on domestic sales and / one8ports9 net of ta8es
?oyalty up to 2/ on e8ports and 1/ also
permitted for use of 7rade Mar=s and >randname9 (it!out any tec!nolo)y transfer
!olly o(ned su#sidiaries can also payroyalty to t!eir parent company
Payment of royalty (it!out any restriction ont!e duration allo(ed.
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India' *DI -utloo=
2ndmost attractive investment destination amon)t!e 7ransnational Corporations 57"Cs6 :"C7ADsorld Investment ?eport9 2$$%
usiness Confidence Inde89 2$$0 :p from t!most attractive destination in 2$$< and 1%t!in
2$$2 2ndMost attractive destination for manufacturin)
Amon) t!e top < investment F!ot spots for t!ene8t 0 years :"C7AD & Corporate Bocation , April 2$$0
Most preferred destination for services A7earneys 2$$% Glo#al Services Bocation Inde85previously -ffs!ore Bocation AttractivenessInde86
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India & -t!er Countries Policy *rame(or=
?estriction on
*orei)n o(ners!ip
+fficiency of Be)al
*rame(or=
Govt. inter. In
Corporate Invest.
*inancial mar=et
Sop!istication
IND-41
IND-35 IND-34
IND-37
MLY-7
MLY-1!
MLY-5"
MLY-#1
$%A-75
$%A-3#$%A-14
$%A-3!
&%N-"1
&%N-5'&%N-3"
&%N-7#
7op 1K!arat "irman Pro)ramme to develop rural
infrastructure at an estimated cost of ?s. 19309$$$ crore5N:S;0$ #illion6
a(!ar Bal "e!ru :r#an ?ene(al Mission ,?s. 1$$9$$$crore 5:S;22 #illion6
Country (ide rural connectivity pro)ramme to lin= allunconnected villa)e !avin) population of %$$ (it! fair(eat!er road underta=en
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7elecommunications
Amon) t!e fastest )ro(in) telecom mar=ets %%$9$$$ =m of optical fi#re ca#le laid
2 million Cellular p!ones added every mont! Amon) t!e lo(est mo#ile tariff in t!e (orld
S!are of private sector %$/
7eledensity of 1$.9 e8pected to #e 2$ inne8t t!ree years
"e( >road >and Policy announced' $9$$$ connections since April 2$$%
Internet su#scri#ers million 5Marc! $%6
Investment -pportunities
Settin) up manufacturin) facilitiesH Supply of !and sets and eEuipments
7elecom & alue added service.
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?oads
Policy
*DI up to 1$$/ is permitted for constructionand maintenance of roads9 !i)!(ays9 ve!icular#rid)es9 toll roads9 ve!icular tunnels
7en year ta8 !oliday for road and !i)!(ayprojects
?ecent Initiatives +8istin) road net(or= of
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Po(er
Policy & Incentive
*DI up to 1$$/ is permitted on t!eautomatic route in all se)ments e8ceptatomic po(er
7enyear ta8 !oliday for )eneration anddistri#ution or transmission and distri#utionof po(er
Institutional ?eforms 7!e +lectricity Act 2$$< allo(s tradin) in
po(er and provides for furt!er dere)ulationH
Independent ?e)ulator in most states
Investment -pportunities Additional capacity reEuired 1$$9$$$ M till
2$12
Investment :S;12$ #illion needed
*inancial closure of over $$$ M capacityac!ieved in last one year
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Ports
Policy & Incentives *DI up to 1$$/ permitted for construction
and maintenance of ports and !ar#ours.
7en year ta8 !oliday
Pu#licprivate partners!ip 12 major ports9 1% minor ports
10 privateK captive projects (it! investment of:S; $$ million completed
20 projects (it! investment of :S;1. #illionunder implementationKa(ard
Investment reEuirement of :S;22 #illion todevelop maritime sector Ports & S!ippin)
Inland (ater(ays
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Industrial Clusters
A lar)e num#er of industrial
clusters 0$$ SM+s and 2$$$ artisan
clusters Account for $/ of
manufactured e8ports andsu#stantial s!are of
employment Gems and e(elleryH C!emicals9
+ner)y9 P!arma9 Metallur)y9Consumer Industry9 *oodProcessin)9 nit(earH Beat!erand leat!er products Auto9 +n)).9
Soft(are9 Minin)9 Mac!ineries9etc.
Government initiative to developinfrastructure in e8istin)industrial clusters
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Special +conomic Oones
Policy Duty free @ones9 deemed
forei)n territories *DI up to 1$$/ permitted
in almost all manufacturin)activities
7ransfer of )oods from D7A
to S+O treated as e8ports9 :nits to #e net forei)n
e8c!an)e earner (it!in %years. "o e8portcommitments
"o limits on D7A sales
Can #e set up in t!e pu#lic9private or joint sector Sin)le indo( Clearance
Incentives *or developer'Income ta8
e8emption for a #loc= of 1$years in 1% years
*or units'1$$/ Income 7a8e8emption for first % years9%$/ for ne8t % years and %$/of t!e plou)!ed #ac= e8portprofits for ne8t % years
+8emption from indirect ta8esHe8cise9 sales9 services ta89 etc.
*reedom to raise +C> (it! outany maturity restrictions
ew *aw on9#= enacted
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Special +conomic Oonescontd.
11 Special +conomic Oones are functional S++PO Mum#ai9 andla9 Coc!in9 C!ennai9
isa=!apatnam9 *alta9 "-IDA9 Surat9 Salt Ba=e9Indore and aipur
-ver $$ functional units employin) over1$$9$$$ persons
+8ports of :S;0 #illion in 2$$0$%
02 ne( Special +conomic Oones !ave #eenapproved and are under esta#lis!ment Many !ave participation (it! State
Governments and Private Sector
Major Industries in Special +conomic Oones Gems & e(ellery9 +lectronics & Jard(are9
Soft(are9 7e8tile & Garment9 +n)ineerin)Goods9 Sports Goods9 Beat!er Products9C!emicals & Allied Products
www6se,india6nic6in
http://www.sezindia.nic.in/http://www.sezindia.nic.in/8/9/2019 India Eco Summit
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Incentives for t!e Development of Industrially>ac=(ard Areas
A special pac=a)e of incentives to promote
industrilisation of industrially #ac=(ard re)ions "ort! +astern states9 Si==im9 ammu & as!mir9
:ttaranc!al and Jimac!al Prades!
Incentives 1$$/ Income 7a8 +8emptions for 1$ years
+8cise Duty +8emptions for 1$ years 7ransport Su#sidy for transportation of ra(
material and finis!ed products9
Investment Su#sidy 5%$$/6
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India & -t!er Countries uality of >usiness+nvironment
State of Cluster
Development
alue C!ain
Presence
*irm Bevel tec!nolo)y
A#sorption
Bocal Supplier
uality
IND-17
IND-37IND-31
IND-37
MLY-#4
MLY-3 MLY-14
MLY-3$%A-1'
$%A-#7$%A-3'
$%A-#7
&%N-3'
&%N-4&%N-5"
&%N-4
7op 1Ki@ project #ein) ta=en up #y t!e Department of IPP
7o set up a (e# ena#led portal to provide for t!e services at t!eCentral9 State and Bocal level durin) t!e entire life cycle of#usiness
7o #e)in (it! a pilot project coverin) 2% services in four states
Project capa#le of rapid upscalin) to cover ot!er services ande8tend to ot!er areas
?i)!t to Information Act for )reater transparency in pu#licadministration
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Investment -pportunities
Development and mana)ement ofinfrastructure
*ood processin)9 includin) lo)istic andsupport services9 development of cold c!ain
Manufacturin) , relocation into India
?&D , levera)in) on a#undant s=illedmanpo(er
I7 & I7+S9 Soft(are as (ell as !ard(are
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India , A Good Place to Put our Money
(econ) Large*t+merging Mar,et
Large*t
)emocracy political *ta.ility/ con*en*u* on
re0orm*
Li.eral /tran*parentinve*tment
policie*
Fourt large*t+conomy
2 -A *a0eplace
to )o .u*ine**
Large*tre*ervoir o0
*,ille)manpoer
Long-term*u*taina.le&ompetitivea)vantage
- %ig grot rateeconomy
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