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According to FDI confidence Index 2004 survey of CEO conducted by AT Kearney, a Global Management Consultancy Firm, India is the third most attractive destination in the world, after China and USA.
Global investors view India as the preferred investment destination because of India’s capability as a business process, IT Services provider and for R&D with long term market potential.
The FDI inflow during the current financial year 2004-2005 upto November, 2004 was US$3607 million as compared to US$2363 million during the corresponding period of the previous year.
To make the environment more attractive, Government has on September 29, 2004 further simplified the FDI approval procedure by placing the following on the automatic route;
i) Transfer of shares from resident to non-resident (including transfer of subscribers’ shares to non-residents) other than in financial services sector provided the investment is covered under automatic route, falls within the sectoral cap and also complies with prescribed pricing guidelines.
ii) Conversion of ECB/Loan into equity provided the activity of the company is covered under automatic route, the foreign equity after such conversion falls within the sectoral cap and also complies with prescribed pricing guidelines.
iii) Cases of increase in foreign equity participation by fresh issue of shares as well as conversion of preference shares into equity capital provided such increase falls within the sectoral cap in the relevant sectors, are within the automatic route and also complies with prescribed pricing guidelines.
This information was given by Shri S. S. Palanimanickam, Minister of State for Finance, in reply to a question by Smt. N.P. Durga in Rajya Sabha today.
BSC/BY/CS-147/05
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