Ways on How to Get Foreign Direct Investment in India

 Foreign Direct Investment In India

Foreign Direct Investment has been an excellent source of funds for a country where capital has never been present in abundance. An individual or an entity invest in an Indian company by means of Foreign Direct Investment (FDI). Now that we have gotten a basic understanding of what FDI is, let us have a look at how to get foreign direct investment in India.

Department of Industrial Policy and Promotion (DIPP) has put forth a standard operating plan on the basis of which FDI proposals are processed. The steps in this process include:

1. Proposal is submitted along with the required documents on the portal of Foreign Investment Facilitation.
2. The case is then assigned by the DIPP to the concerned ministry in the next 2 days.
3. Within a TAT of 2 days, the proposal is then circulated online to the Reserve Bank of India for review from FEMA. All the proposals are shared with the Department of Revenue and the Ministry of External Affairs within 2 days. Comments received from these two departments are then shared with the assigned department or concerned ministry in order to finalise the proposal shared.
4. The proposal is examined within a week’s time after which all the additional information missing is acquired as well.
5. After all the additional information that is required is gathered, the concerned authority gives its decision in two weeks’ time. The approval or rejection letters are further sent to the applicant online, consulted ministries, and the DIPP as well. In cases where the foreign equity flow is more than Rs. 5000 Crore, the concerned authority needs to put forth the same in front of the Cabinet Committee on Economic Affairs for discussion on the timelines.

The following documents need to be uploaded along with the proposal for the FDI to go through:

1. Certificate of Incorporation, Memorandum of Association, Board Resolution, Audited Financial Statement of the Last Financial Year, and Article of Association from the investor as well as investee entity.
2. List of names, identification proof of the foreign collaborators of the investor entity.
3. Shareholding pattern related to the investment carried out by the company being invested in.
4. Affidavit stating that all the information given in the hard copy as well as online is correct.
5. Downstream intimation copy.
6. Valuation certificate approved by a certified Chartered Accountant.
7. High court order pertaining to any scheme of arrangement.