FDI proposals worth billions of dollars from India's neighbouring countries pending for approval

40 to 50 foreign direct investment proposals from countries that share a land border with India are pending for approval with the government, said a report on Wednesday.

These proposals are pending under the provision of Press Note 3, reported PTI quoting a source.

Under Press Note 3, the government has made it mandatory to take a prior approval for foreign investment from countries that share land border with India.

''About 40-50 proposals are pending with the commerce and industry ministry as they require security and political clearances,'' one of the sources said.

“FDI is not totally banned from these countries. It is just that they (investors from these countries) have to follow the government approval route and of course that takes times,'' a source added.

Press Note 3 of 2020 says that an “entity of a country, which shares a land boundary with India or the beneficial owner of an investment into India who is situated in or is a citizen of any such country, can only invest under the government route”.

Press Note 3 was introduced in April 2020 as the government wanted to stop the opportunistic takeovers of domestic firms following the Covid-19 pandemic’s impact on the economy. 

The government has a commitment to clear these proposals in three months’ time, but it takes about seven months for the approval.

MG Motor India, a British brand owned by China’s largest automaker SAIC Motor Corp, has been waiting for around two years now to get approval of the government to raise funds from its parent firm.

Due to this, MG Motor has recently said that it plans to offer a majority stake to local partners and investors in next 2-4 years to raise funds. The car manufacturer is looking to raise around Rs 5,000 crore capital to fund next round of its growth in the country.

Government has formed an inter-ministerial committee to scrutinise these proposals.

Indian has received $2.5 billion FDI equity from China between April 2000 to March 2023. Apart from China, India has received $0.07 million investment from Bangladesh, $3.3 million from Nepal, $9 million from Myanmar and $2.5 million from Afghanistan.

(With inputs from PTI)

 

Also Read : Goldman Sachs to sack 250 employees in coming weeks: Report

Also Watch : How wrestlers' protest against Brij Bhushan reminds of legendary boxer Muhammad Ali