Easier FDI norms coming for ‘most favoured nations’

Source: The Hindu Business Line, Jan 26, 2019

New Delhi: The government is mulling a new investment law that will categorise nations into ‘most favoured’ and ‘not pro-India’ besides emphasising contract enforcement and fast-track dispute resolution.

A new Bill is likely to be introduced in the Budget session of Parliament that is scheduled to begin on January 31.

Officials told BusinessLine that the “draft of the Bill, which is being vetted by the Law Ministry, will be placed before the Cabinet for approval for introduction in Parliament.” The Bill might even get a mention in the Budget speech. Efforts will be made to get it passed during the Budget session itself. Read the rest of this entry »

India attracted $49 billion FDI in 2019, among top 10 recipients of overseas investment: UNCTAD

Source: The Economic Times, Jan 20, 2019

New Delhi: The United Nations Conference on Trade and Development (UNCTAD) on Monday said that India was among the top 10 recipients of Foreign Direct Investment (FDI) in 2019, attracting $49 billion in inflows, a 16% increase from the previous year, driving the FDI growth in South Asia. The majority went into services industries, including information technology.

UNCTAD, in its Global Investment Trend Monitor report said that the global foreign direct investment remained flat in 2019 at $1.39 trillion, a 1% decline from a revised $1.41 trillion in 2018.

“South Asia recorded a 10% increase in FDI to $60 billion. The growth was driven by India, with a 16% increase in inflows to an estimated $49 billion. The majority went into services industries, including information technology,” it said.

Inflows into Bangladesh and Pakistan declined by 6% and 20%, respectively, to $3.4 billion and $1.9 billion.

“This is against the backdrop of weaker macroeconomic performance and policy uncertainty for investors, including trade tensions,” it said.

According to the report, flows of FDI to developing economies remained unchanged at an estimated $695 billion.
It also showed that FDI rose 16% in Latin America and the Caribbean and 3% in Africa.

As per the multilateral agency, FDI flows to developed countries remained at a historically low level, decreasing by a further 6% per cent to an estimated $643 billion.

FDI to the European Union fell 15% to $305 billion while flows to the United States-the largest recipient of FDI- remained stable at $251 billion.

China, the second largest recipient, saw zero-growth in FDI inflows. Its FDI inflows in 2018 were $139 billion and $140 billion in 2019. The FDI in the UK was down 6%
as Brexit unfolded.

Slow M&A activity
The report showed that cross-border M&As declined 40% in 2019 to $490 billion – the lowest level since 2014.

The fall in global cross-border M&As sales was deepest in the services sector which declined 56% to $207 billion, followed by a 19% fall in manufacturing to $249 billion and a 14% decrease in primary sector to $34 billion.

The decline in M&A values was driven also by a lower number of mega deals. In 2019, there were 30 mega deals above $5 billion compared to 39 in 2018.

Read the rest of this entry »

Odisha's FDI equity inflows surge 330% to $43 million in H1FY20

Source: Business Standard, Jan 08, 2019

Bhubaneswar: Odisha’s Foreign Direct Investment (FD) equity inflows have soared 330 per cent during H1 or April-September period of FY20. FDI inflows into the state rose from $10 million to $43 million.

Odisha ranks next only to Kerala & Lakshwadeep in terms of registering growth in inbound FDIs where the FDI growth stood at 406 per cent year-on-year, said a study by CARE Ratings, quoting figures from the Department for Promotion of Industry & Internal Trade (DPIIT).

In terms of growth, the FDI equity inflows increased in Kerala, Odisha and North Eastern states while Andhra Pradesh, West Bengal, Chandigarh (including Punjab, Haryana and Himachal Pradesh), Rajasthan, Madhya Pradesh, Goa and Uttar Pradesh declined in H1 FY20 when compared with the corresponding period last year.

In H1 FY20, Maharashtra, Delhi, Karnataka and Gujarat accounted for more than 70 per cent of the total FDI equity inflows. Delhi had the highest share of 27 per cent in the total FDI equity inflows amounting to $7.2 billion in H1 FY20 and these inflows were 27 per cent higher than the $5.6 billion equity inflows in H1 FY19.

In the first half of FY20, Karnataka surpassed Maharashtra in terms of FDI equity inflows. Maharashtra’s share in the total FDI equity inflows declined from 23 per cent in H1 FY19 to 14 per cent in H1 FY20 and the total equity inflows declined by 32 per cent on the y-o-y basis to $3.6 billion in H1 FY20.

On the other hand, Karnataka’s share increased from 11 per cent in H1 FY19 to 18 per cent in H1 FY20, having grown by substantial 82 per cent in H1 FY20.

Read the rest of this entry »

Gujarat received Rs 24,012 crore FDI in first half of FY20

Source: Financial Express, Jan 02, 2020

Ahmedabad: Gujarat has received Rs 24,012 crore in Foreign Direct Investment (FDI) in various sectors during the first half of the financial year 2019-20, which is almost double compared with the FDI recieved in the entire FY 2018-19, a state government release said.

The state had received Rs 12,612 crore FDI during the last fiscal. As per the report of the Department for Promotion of Industry and Internal Trade (DPIIT) under the Union Ministry of Commerce and Industry, Gujarat attracted FDI of Rs 24,012 crore between April and September of the current fiscal, which is double than the entire investment received last year, the state government stated in a release.

“This shows that Gujarat has emerged as the best destination for investment in the country. Between April 2000 and September 2019, the state has received a cumulative FDI worth Rs 1,41,000 crore,” it stated.

Out of the 2574 large industries set up across India in the last three years, 734 such large units were set up in Gujarat alone, it said. Gujarat has managed to achieve this feat because of transparent and pro-people and pro-industry policies of the Vijay Rupani government, it said.

FDI inflows rose 15% in H1FY20, services sector got the lion’s share

Source: Business Standard, Jan 02, 2020

New Delhi: Inbound foreign direct equity investments (FDI) rose 15 per cent in the April-September period of the current fiscal year (2019-20, or FY20), according to data released by the Department for Promotion of Industry and Internal Trade (DPIIT).

The figures, released on Tuesday, showed that in the first half of FY20, equity inflows amounted to $26.09 billion, up from the $22.66 billion received in the corresponding period of the previous year.

The services sector — encompassing financial, banking, insurance, outsourcing, among other industries — was the highest recipient of FDI at $4.4 billion. This was followed by the telecommunications sector, which garnered $4.3 billion, and the computer software and hardware at slightly more than $4 billion. Read the rest of this entry »

DPIIT to soon issue clarification on 26 per cent FDI in digital media sector

Source: The Economic Times, Dec 25, 2019

NEW DELHI: The Department for Promotion of Industry and Internal Trade (DPIIT) is expected to soon issue a clarification on the issues raised by certain stakeholders over the government’s decision to permit 26 per cent FDI in digital media sector, according to sources.

Certain industry players and experts have stated that the move to cap foreign direct investment (FDI) in digital media sector to 26 per cent throws up questions that need clarifications as some of those who were looking to raise funds could be restricted.

There are mainly two issues — how the FDI policy of the sector would treat news aggregators and what would happen to those digital media companies where overseas investment is over 26 per cent — that need clarification.

On these matters, the department is expected to issue clarification soon, a source said.

The DPIIT has already taken views of the Information and Broadcasting Ministry on the issue.

Deloitte India Partner Jehil Thakkar had said that clarity was needed on how to treat cases of television broadcasters that stream news online, but are allowed 49 per cent FDI.

“What happens to those, whether they qualify under 26 per cent or 49 per cent (FDI)? What happens to news websites which are 100 per cent foreign entity?” he said.

Internet and Mobile Association of India too had sought clarification on the issue.

In a representation to the DPIIT, it stated that the decision will have impact on startup ecosystem as continued FDI is critical to enable Indian digital media startups to achieve global scale.

“Several foreign strategic intermediaries have set up their operations in India, as digital media was categorized as 100 per cent FDI under the automatic route. A clarification on the non-applicability of the new FDI measure would be critical for them to continue making massive investments in India,” it added.

Government may raise FDI cap in insurance to 74%

Source: The Hindu Business Line, Dec 18, 2019

Mumbai: In the run up to the Budget, life insurance companies have pitched for increasing the cap for foreign direct investment (FDI) in the sector from 49 per cent to 74 per cent.

The issue was taken up at a recent general body meeting of the Life Insurance Council, where life insurance companies were on the same page vis-a-vis the proposal to hike the FDI ceiling in the sector.

“All life insurance companies have said they are in favour of increasing the FDI cap, which can be decided by the government,” sources familiar with the development told BusinessLine.

Finance Minister Nirmala Sitharaman had in the Budget 2019-20 announced that the government would “examine suggestions of further opening up of FDI” in a number of sectors, including insurance, along with 100 per cent FDI in insurance intermediaries.

At present, FDI up to 49 per cent is allowed in the insurance sector through the automatic route. Following the Budget announcement on further opening up FDI in insurance sector, the insurance regulator had earlier this month sought views of stakeholders.“Increasing the FDI cap will bring in more capital for these companies and give the foreign partner more say in the management of the companies. Many of the foreign partners are getting restless,” noted a source.