Kamal Ghorui
The government has identified 40 sub-sectors, including rare earth magnets and printed circuit boards, for expedited clearance of foreign direct investment (FDI) proposals from countries sharing land borders with India, PTI reported.Under the revised framework, proposals from countries such as China, Pakistan, Bangladesh, Nepal, Bhutan, Myanmar and Afghanistan in these sectors will be processed within 60 days, as per the updated standard operating procedure (SOP).The move follows a decision taken in March to fast-track FDI approvals in specified manufacturing sectors from these countries.However, the government has clarified that majority ownership and control of the investee entity must remain with resident Indian citizens or Indian-owned entities at all times.The 40 identified sub-sectors fall under six broad categories –capital goods manufacturing, electronic capital goods and electronic components, polysilicon and ingot-wafer production, advanced battery components, rare earth permanent magnets, and rare earth processing.These include manufacturing of insulation items, castings and forgings for thermal, hydro and nuclear power plants, machine tools, display components such as LCD and LED panels, camera modules, electronic capacitors, speakers and microphones, lithium-ion batteries, wearables, and rare earth metal and magnet processing facilities.The SOP also introduces detailed reporting norms for investments involving entities with direct or indirect ownership from land-bordering countries.“The reporting under these guidelines will be governed under the Foreign Exchange Management (Mode of Payment and Reporting of Non-debt Instruments) Regulations, 2019, and the information will be accessible by the Reserve Bank of India (RBI),” the DPIIT said.The responsibility for reporting lies with the Indian investee company, which must submit required details to the DPIIT before receiving foreign capital.“The reporting is to be made prior to the inward remittance of foreign capital. In cases which do not involve foreign capital inward remittances, the reporting is to be made prior to execution of the relevant transactions, including issuance/transfer of capital instruments, as the case may be,” it added.Investors will be required to disclose details such as shareholding patterns, beneficial ownership, organisational structure, promoters, board composition, key managerial personnel and control rights.The Indian entity will also need to provide incorporation details and disclose existing or proposed shareholding linked to entities from land-bordering countries.
