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Scope for Foreign Investment
As the industry moves forward, opportunities
abound in a country which has the world's
largest middle class -- some 300 million strong and still growing.
The bulk of expansion in the world milk production is taking place
in Asia, and India figures prominently in it. 'Bharat' - the golden
sparrow, is attracting foreign investors who are assured of
good returns.The scope for foreign investment
in India is vast. India offers to foreign investors a
well balanced package of fiscal incentives for exports and industrial
investments. It includes complete tax exemptions and tax
holidays. Investment incentives are offered by both the Central
Government and the Government of the State in which the unit is
located. India has tax treaties with 40 countries.
Foreign investors and Non-Resident Indians (NRIs) have a the choice of
entering the industrial, financial or service sector. Within the sectors, there are two
options available:
 | They can undertake imports into and exports from India and
set up joint ventures with focus on the domestic Indian market. |
| They can shift the production base to India by
investing in 100 per cent export-oriented units (EOUs). The focus may be on
third-country markets or manufacturing of components for partner units in other countries.
India now welcomes direct foreign investment in virtually all industries. Foreign
investors can freely hold a majority stake in most industrial
enterprises as well as trading companies engaged in exports. |
India, post liberalization, has not only opened it's doors to foreign investors but also made investing easier for
them.
| Foreign exchange controls have been eased on
the account of trade. |
| Companies can raise funds from overseas securities
markets and now have considerable freedom to invest abroad
for expanding global operations. |
| Foreign investors can remit earnings from Indian
operations. |
| Foreign trade is largely free from regulations, and tariff levels have come down sharply
in the last two years. While majority foreign investment (up to 51 per cent) is allowed in
most industries, foreign equity up to 100 per cent is encouraged in
export-oriented units, depending on the merit of the proposal. In certain specified
industries reserved for the small scale sector, foreign equity up to 24 per cent is now
permitted. |
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