How to Get Funds through FDI
Foreign direct investment (FDI) is when a company that is not native to the country invests and controls the ownership in a business entity of another country. It is usually a case of more than just monetary support. The investment brings with it exchange of skills, technology and knowledge. FDI holds an important position from an economic standpoint. FDI has steadily improved and progressed ever since the economic liberalization.
It is a no-brainer that obtaining any kind of foreign funding in India is an overwhelming task. It is a cumbersome task and would require effort and strong connections. To ease the task for you an FDI India, an FDI agency comes into play. We are determined to help your business scale new heights with the right business funding. We help you ease the task of obtaining foreign funds.
Routes through which India gets FDI
Automatic route: This is the route for non-residents or Indian company, these are the ones who do not require any prior permission and approval from the RBI or government of India for FDI. Some of the services which come under the automatic route category are-
- Agriculture & Animal Husbandry,
- Air-Transport Services (non-scheduled and other services under the civil aviation sector),
- Airports (Greenfield + Brownfield),
- Asset Reconstruction Companies,
- Auto-components, Automobiles, Biotechnology (Greenfield),
- Broadcast Content Services (Up-linking & down-linking of TV channels,
- Broadcasting Duty-Free Shops,
- E-commerce Activities, Electronic Systems
Government route: In this case, it is mandatory to get the government’s approval. The company would be required to apply through some reliable Foreign Investment Facilitation Portal, which helps with the single-window clearance.
The next step would be to forward the application to the respective ministry, which would then approve or reject the application after due consultation with the Department for Promotion of Industry and Internal Trade (DPIIT), Ministry of Commerce.
DPIIT will then issue the Standard Operating Procedure (SOP) for processing of applications under the latest FDI policy. Sectors which come under the ‘up to 100% Government Route’ category are
- Banking & Public sector: 20%
- Broadcasting Content Services: 49%
- Core Investment Company: 100%
- Food Products Retail Trading: 100%
- Mining & Minerals separations of titanium bearing minerals and ores: 100%
- Multi-Brand Retail Trading: 51%
- Print Media (publishing of newspaper, periodicals and Indian editions of foreign magazines dealing with news & current affairs): 26%
- Satellite (Establishment and operations): 100%
Foreign Direct Investment in India showed a rise of 13% in FY20, recording an increase from $44.36 to $49.97 billion. The FDI inflows were recorded to be $13.2 billion in a quarter which ended in March. The stats clearly state the rise of interest of other countries in India. Foreign funding in India signifies the growth and development of the economy. If you are a business seeking foreign investment, get in touch with FDI India, from connecting you with a possible investor to helping you with all the major and minor tasks involved, FDI India stays with you and assists you through it all.
FDI Policy Post COVID-19
On 17 April 2020, India altered its FDI (Foreign Direct Investment) policy to safeguard Indian businesses from some of the “opportunistic takeovers/acquisitions due to COVID-19 pandemic”. While the new FDI policy offers no restriction to the markets, it also ensures that all the FDI are thoroughly checked for authenticity by the Ministry of Commerce and Industry.