FDI consolidated policy includes startups, allows 100% foreign venture capital investment

New Delhi: The Ministry of Commerce in its consolidated document published in FDI policy Monday included for the first time the creation of companies that can generate up to 100 percent of the funds of the foreign Investor Capital Investor (FVCI).

The portfolio may issue equity instruments or shares or debt instruments to FVCI against the receipt of remittances, said the document incorporating all
Changes in FDI policy over the past year.

“In addition, startups can issue convertible tickets to a resident outside India (under certain conditions),” he said.

A person resident outside India (other than national / Pakistan and Bangladesh) will be allowed to purchase the convertible bonds issued by an Indian launch company for an amount of Rs 25 lakh or more in a single tranche.

NRI can also acquire convertible bonds based on non-repatriation, according to the Department of Industrial Policy and Promotion (DIPP), Ministry of Commerce document.

“A newly created company dedicated to a sector where foreign investment requires government approval can issue convertible notes to a non-resident, with government approval,” he said, adding that the start of the issue of convertible bonds would be required to provide reports prescribed by the RBI.

The government is focusing on start-ups to promote job creation and innovation. The DIPP, which deals with FDI issues, brings together all the policies of the foreign investment regime into a single document to facilitate and understand investors.

Investors also had to go through several press releases issued by the ministry and RBI regulations to understand the policy. The government updates the policy every year.

The whole exercise aims to provide a favorable climate for foreign investors and, in turn, attract more FDI to stimulate economic growth and create jobs.

Over the past year, the government has liberalized FDI policy in more than a dozen sectors, including defense, civil aviation, construction and development, security and private broadcasters.

Foreign investments are considered crucial for India, which requires about $ 1 trillion to revise its infrastructure sector like ports, airports and roads to boost growth.

Foreign investment will help improve the country’s balance of payments situation and will strengthen the value of the rupee relative to other currencies in the world, especially the US dollar.

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