FDI in figures

Investing procedures

Legal framework

Tax and non-tax incentives for setting up new industrial units in certain specific sectors that includes power, ports, highways, electronics and software. Government has also set up special export oriented zones called export-processing zones (EPZs) or special economic zones (SEZs) to encourage foreign investment.

The central government’s development banks and the state industrial development banks extend medium- and long-term loans and sometimes take equity in new projects.

However, the government has set sector-specific caps on foreign equity in certain industries, such as basic and cellular telecommunications services, banking, retail and civil aviation.

For more details visit: Investment Commission of India.

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.

Local business incentives

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.

Investment aid agency

Foreign Investment Promotion Board (FIPB)
Foreign Investment Implementation Authority (FIIA)
Department of Industrial Policy & Promotion
India Brand Equity Foundation (IBEF)