India eases rules for foreign partners
FE Team | Published: April 04, 2011 00:00:00 | Updated: February 01, 2018 00:00:00
New Delhi: The government on Thursday scrapped the requirement that foreign companies need to obtain the approval of their existing Indian joint venture partners for further collaborations or solo ventures in the same field, reports livemint.com.
"It is expected this new measure will promote the competitiveness of India as an investment destination and be instrumental in attracting higher levels of FDI (foreign direct investment) and technology inflows into the country," the department of industrial policy and promotion (DIPP) said in a statement.
Akash Gupt, executive director at PricewaterhouseCoopers, said the old policy had lost its relevance and the abolition was long overdue. "It was discouraging foreign investors to set up joint ventures in India," he added.
The government had formulated the policy in 1998 when Indian companies complained of being dictated to by foreign partners.
However, foreign companies complained that Indian partners were using the provision for rent-seeking.
In 2005, the government did away with the requirement of the provision for joint ventures formulated after the date.
However, the requirement was still necessary for foreign companies that formed joint ventures before 2005.
With the latest notification, DIPP has abolished the provision altogether.
Share if you like