India Eco Summit

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/


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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/


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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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India Eco Summit

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Transcript of India Eco Summit