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Chinese smartphone maker Xiaomi’s future in India is in the hands of a special panel, which has been set up by the government to decide whether Xiaomi’s proposal meets the "<a href="http://www.businessinsider.in/Not-everything-can-be-termed-state-of-the-art-says-Indian-government-to-facilitate-FDI/articleshow/51628211.cms">cutting edge technology</a>" condition. Only if the panel says yes that Xiaomi will be allowed to set up stores in India without the mandatory domestic sourcing, as per the <a href="http://www.businessinsider.in/New-FDI-rules-to-upset-online-shoppers-no-more-promotional-offers-and-cash-backs/articleshow/51644272.cms">new FDI rules</a>. 
 
The new rules say that companies bringing cutting edge and state-of-the-art technology to India will be allowed to open single-brand outlets without 30% compulsory sourcing of materials locally subject to government approval. 
 
To make good use of this opportunity, Xiaomi had earlier this month applied for single-brand retail under the state-of-the-art category, seeking permission to forego the 30% sourcing norm for a range of its products including Wi-Fi amplifiers, Bluetooth speakers and power banks. 
 
The panel comprises of three members, secretary of DIPP, one member of the NITI Aayog, and a representative of the administrative ministries including telecom and information technology. It has been formed by government to define cutting edge technology. The panel will now consider all such proposals submitted under this category on a case to case basis. 
 
As per a senior government official, "Any technology which has never been made before in India and cannot be replicated is worthy of being considered under the cutting edge definition." 
 
Besides Xiaomi, Apple had also applied for a similar licence, and the application is being <a href="http://www.businessinsider.in/Apple-to-open-stores-in-India/articleshow/51938335.cms">considered for approval </a>by the government. 
 
<a href="http://www.livemint.com/rf/Image-621x414/LiveMint/Period1/2014/07/16/Photos/xiaomicorp--621x414.jpg">Image source</a>

Xiaomi's future in India is at stake

If things go as planned, the requirement of mandatory domestic sourcing for <keyword id="6354427" type="CITY" weightage="100" keywordseo="Apple">Apple</keyword> would be waived off, allowing the tech giant to open its own retail outlets in India. 
 
Apple has always been keen on opening its own stores in India, but has faced roadblocks from the policy requirement of mandatory sourcing of 30% of the goods from within the country, because the lack of vendors who can fulfill this need. Now that there have been some changes in the policy, Apple is looking forward to government’s nod, citing that it fulfills the conditions of 'state-of-the-art' and 'cutting-edge technology'. 
 
It was on Tuesday that Apple had made a presentation before a committee headed by industrial policy and promotion secretary Ramesh Abhishek. In the presentation, it made a case for use of the special provision, and the decision would be announced in the coming few days. 
As per some TOI sources, Apple fits for the relaxation of these norms. "Their products certainly meet the requirement for waiving the local sourcing clause," a source told TOI. 
 
To gain more confidence from the government, Apple has also indicated that it may start producing in India in the future, while adding that it has no immediate plans of selling refurbished phones in the country. 
 
Rival phone makers Xiaomi and LeEco had also proposed to open single-brand retail outlets, but their proposals are yet to be taken up by the authorities. 
 
<a href="http://www.pc-tablet.co.in/wp-content/uploads/2015/10/apple-store-india.jpeg">Image source</a>

Government could waive off the 30% sourcing norm for Apple to open stores in India

<ul><li>The latest <keyword id="722308" type="PERSON" weightage="20" keywordseo="World-Investment-Report">World Investment Report</keyword> showed India dropping a spot to 10th, in the list of top FDI receiving countries.</li><li>India’s witnessed 6% growth in FDI, to reach $42 billion in 2018.</li><li>Global FDI inflows slipped by 13%, from $1.5 trillion to $1.3 trillion, South Asia witnessed 3.5% increase in FDI inflows.</li><li>China, which retained the number two position, received the highest foreign inflows among the developing countries at an all time high of $139 billion, a growth of 4%. </li></ul>Despite a 6% surge in its <keyword id="44749" type="ORGANIZATION" weightage="20" keywordseo="Foreign-Direct-Investment">Foreign Direct Investment</keyword> (FDI) inflow in 2018, India slipped a spot in the list of countries receiving highest FDI, to 10th. The latest <a href="https://unctad.org/en/pages/DIAE/World%20Investment%20Report/WIR-Series.aspx">World Investment report</a> of the United Nations Conference on Trade &amp; Investment (<a href="https://unctad.org/en/Pages/Home.aspx">UNCTAD</a>), an organization that aims at maximizing trade, investment and development opportunities of developing countries. The increase in FDI inflows is being attributed to manufacturing, communication and financial services sectors, which were the top three FDI recipients in India. Growth in cross-border mergers and acquisitions -- from $23 billion in 2017 to $33 billion in 2018 -- was primarily due to retail trade, which includes e-commerce, and telecommunication, said the report. The $16 billion<a href="https://economictimes.indiatimes.com/small-biz/startups/newsbuzz/walmart-acquires-flipkart-for-16-bn-worlds-largest-ecommerce-deal/articleshow/64095145.cms"> acquisition </a>of Flipkart by Walmart, and telecommunication deals worth $2 billion involving Vodafone and American Tower, were among the major deals this year. The report also highlighted the changes to India’s FDI policy, which it termed as “restrictive.” In February 2019, India introduced changes to its e-commerce sector where it banned foreign companies to sell their own products in e-commerce marketplace companies like Amazon. Global FDI slowdown Global FDI flows fell by 13% in 2018 from $1.5 billion in 2017 to $1.3 billion in 2018, which is the third consecutive annual decline, according to UNCTAD’s World Investment Report. The contraction was largely precipitated by United States multinational enterprises (MNEs) repatriating earnings from abroad, making use of tax reforms introduced by the country in 2017, designed for that purpose. Developed countries were the worst hit by the earnings repatriation, where flows fell by a quarter to $557 billion-levels last seen in 2004. South Asia surges ahead As global FDI inflows slump down, South Asia witnessed a <a href="https://economictimes.indiatimes.com/news/economy/indicators/fdi-flows-to-india-grew-6-in-2018-to-42-bn-un-report/articleshow/69761999.cms?utm_source=ETTopNews&amp;utm_medium=HP&amp;utm_campaign=TN&amp;utm_content=23">growth</a> of 3.5% to $54 billion in FDI inflows. "All subregions in developing Asia are expected to receive higher inflows. Prospects are underpinned by a doubling in value of announced greenfield projects in the region, suggesting continued growth potential for FDI," it said while sounding a note of caution on global uncertainties. It said uncertainties stemming from global trade tensions could weigh on the mood in the region.

India has slipped to the 10th spot in attracting foreign direct investment

The government has permitted <keyword id="44749" type="ORGANIZATION" weightage="20" keywordseo="Foreign-Direct-Investment">foreign direct investment</keyword> (FDI) of up to 74 per cent under the automatic route in the defence sector with a view to attracting overseas investors, according to a press note issued by the DPIIT on Thursday. However, foreign investments in the defence sector would be subject to scrutiny on the grounds of national security and the government reserves the right to review any foreign investment in the sector that affects or may affect national security, the Department for Promotion of Industry and Internal Trade (DPIIT) said in the note. As per the current FDI policy, 100 per cent overseas investments are permitted in the defence industry -- 49 per cent under the automatic route, while beyond that government approval was required. According to the Press Note 4 (2020 series): "FDI up to 74 per cent under automatic route shall be permitted for companies seeking new industrial licences". It also said that infusion of fresh investment up to 49 per cent, in a company not seeking industrial licence or which already has government approval for FDI in defence, shall require "mandatory" submission of a declaration with the defence ministry in case change in equity/shareholding pattern or transfer of stake by existing investor to new foreign investor for FDI up to 49 per cent, within 30 days of such change. Proposal for raising FDI beyond 49 per cent from such companies will require government approval, it added. "The decision will take effect from the date of FEMA (Foreign Exchange Management Act) notification," it said. The decision to permit up to 74 per cent FDI in the <keyword id="2377476" type="PERSON" weightage="20" keywordseo="defence-manufacturing">defence manufacturing</keyword> through the automatic route was announced by Finance Minister Nirmala Sitharaman in May while announcing the fourth tranche of the Rs 20 lakh crore stimulus package for the coronavirus-hit economy. In July 2018, the government had relaxed foreign direct investment norms in the defence sector by allowing up to 49 per cent FDI under the automatic route. The move was aimed at boosting domestic industry as India imports about 70 per cent of its military hardware. According to the DPIIT data, defence industries has received FDI equity inflows of USD 9.52 million (Rs 56.88 crore) during April 2000 and March 2020. Under the government route, foreign investors have to take prior approval of the respective ministry/department, while in the automatic route, the investor just has to inform the RBI after the investment is made. Total FDI into India increased by 18 per cent to USD 73.45 billion in 2019-20. SEE ALSO: <a href="https://www.businessinsider.in/sports/news/dailyhunt-app-founders-confirm-ipl-2020-associate-sponsorship/articleshow/78169667.cms">EXCLUSIVE: Dailyhunt founders confirm IPL 2020 associate sponsorship — promise new release for Josh ahead of India’s biggest cricket tournament</a> <a href="https://www.businessinsider.in/stock-market/markets/news/hcl-tech-enters-the-list-of-top-10-most-valued-companies-in-india/articleshow/78165311.cms">HCL Tech enters the list of top 10 most valued companies in India</a> <a href="https://www.businessinsider.in/science/space/news/first-intact-planet-found-circling-a-dead-star-this-jupiter-sized-anomaly-is-in-orbit-rather-than-being-pulled-apart-at-the-seams/articleshow/78166938.cms">First 'intact' planet found circling a dead star — this Jupiter-sized anomaly is in orbit rather than being pulled apart at the seams</a>

Foreign investors can now pump in up to 74 % FDI under automatic route in India's defence sector

Going by the data presented by Minister of State for Defence Rao Inderjit Singh in parliament on Tuesday, the <keyword id="6412360" type="UNKNOWN" weightage="20" keywordseo="Defence-Sector">defence sector</keyword> stood at the bottom of the list of sectors that received foreign investment this year with merely Rs 56 lakh in its kitty. 
 This is despite the persistent government efforts to market India as a defence manufacturing hub ever since last year when the norms were eased by the <keyword id="65795" type="ORGANIZATION" weightage="20" keywordseo="BJP-government">BJP government</keyword> last year in August, including FII <keyword id="6362476" type="ORGANIZATION" weightage="20" keywordseo="investments">investments</keyword> upto 24 percent on automatic route. 
 This dismal <keyword id="44528" type="ORGANIZATION" weightage="20" keywordseo="FDI">FDI</keyword> inflow was the reason why another set of big changes was announced by the government in November in defence FDI. The changes included FDI upto 49 percent through automatic route, permissions to be taken from FIPB beyond 49 percent, besides FVCI and portfolio being also permitted 49 pc through automatic route. 
 However, while the government made it easier for foreign investors to venture into the defence <keyword id="6395867" type="UNKNOWN" weightage="20" keywordseo="manufacturing-sector">manufacturing sector</keyword>, it shied away from being liberal on the FDI limit, capping it to 49 percent under the new automatic process, a bone of contention for investors who desire a controlling stake. 
 
Other significant sectors like Glue and Gelatin, Dye Stuff and Scientific Instruments beat the investments into the defence sector exponentially. 
 
(image credit: BCCL)

Government fails to attract FDI in Defence Industry, only Rs 56 lakh since Sept last year

New Delhi, The government on Wednesday eased <keyword id="19946825" type="General" weightage="20" keywordseo="foreign-direct-investment" source="keywords">Foreign Direct Investment</keyword> (<keyword id="19946824" type="General" weightage="20" keywordseo="fdi" source="keywords">FDI</keyword>) norms in the space sector by allowing 100 per cent overseas investment in making components for satellites, as part of efforts to attract overseas players and private companies into the segment. The decision was taken at the <keyword id="19901283" type="General" weightage="20" keywordseo="cabinet" source="keywords">Cabinet</keyword> meeting chaired by Prime Minister <keyword id="19895781" type="General" weightage="20" keywordseo="narendra-modi" source="keywords">Narendra Modi</keyword>. Now, the satellite sub-sector has been divided into three different activities with defined limits for foreign investment in each such sector, according to an official statement. Presently, FDI in the space sector is allowed up to 100 per cent in the area of satellite establishment and operations through government route only. By changing the current policy, the government has allowed up to 74 per cent FDI under automatic route in satellites-manufacturing and operation, satellite data products, and ground and user segments. Beyond this limit, government approval will be required in these areas for FDI, it said. Up to 49 per cent FDI is allowed through the automatic route for launch vehicles and associated systems or subsystems, creation of spaceports for launching and receiving spacecraft. Beyond 49 per cent, FDI in these activities would require government approval, it added. Further, up to 100 per cent overseas investments are permitted under the automatic route for manufacturing of components and systems/sub-systems for satellites, ground and user segments. This increased private sector participation would help generate employment, enable modern technology absorption and make the sector self-reliant. It is expected to integrate Indian companies into global value chains. Through the decision, the government seeks to liberalise the FDI policy provisions in the space sector by prescribing easy entry routes and providing clarity for overseas investments in satellites, launch vehicles and associated systems or subsystems, creation of spaceports for launching and receiving spacecraft and manufacturing of space-related components and systems. With this, companies will be able to set up their manufacturing facilities within the country, duly encouraging Make In <keyword id="19895063" type="General" weightage="20" keywordseo="india" source="keywords">India</keyword> initiatives of the government.

Govt eases FDI norms in space sector; 100% in making components for satellites

NEW DELHI: The <keyword id="6355512" type="ORGANIZATION" weightage="20" keywordseo="Union-Cabinet">Union Cabinet</keyword> on Wednesday allowed foreign investment in the Railways for the first time and raised limit for such investment in the defence sector, steps intended to raise funds for expansion of the Railways and encourage domestic manufacture of arms. 
 
100 per cent foreign investment in railway infrastructure projects will be allowed while in the case of defence the limit has been raised to 49 per cent from the current 26 per cent, subject to the Indian owners exercising management control. 
 The <keyword id="44528" type="ORGANIZATION" weightage="20" keywordseo="FDI">FDI</keyword> hike in defence is intended to cut imports by indigenising defence production as India is one of the world’s largest arms importers. 
 "It is a composite cap, incorporating all forms of foreign investment, FDI, FII, FPI, NRI, etc," said a <keyword id="6542458" type="POSITION" weightage="20" keywordseo="Government-official">government official</keyword> confirming that the proposals has been cleared. Experts did not seem impressed with the cautious stance of the <keyword id="6360789" type="ORGANIZATION" weightage="20" keywordseo="Modi-Government">Modi government</keyword> on defence. 
 
"Good development, but not great. Round one has gone to protectionist forces. 49 per cent is the same as 26 per cent technically and hence may not open the investment floodgates," said Amber Dubey, Partner and India Head of Aerospace and Defense at global consultancy KPMG. 
 
"We hope better judgment prevails and we have the FDI limit enhanced to 74 per cent later this year," he added. Official notifications giving effect to changes will be issued soon, after the minutes of the cabinet meeting are finalised. 
 Foreign investment in defence will be though the approval route, implying it will have to be cleared by the Foreign Investment Promotion Board (FIPB). Though the 49 per cent cap will be general rule for the defence sector, 100 per cent overseas ownership will be allowed in case the <keyword id="6362476" type="ORGANIZATION" weightage="20" keywordseo="investments">investments</keyword> comes bundled with state of the art technology. Such investment proposals will have to be cleared by the Cabinet Committee on Security (CCS). 
 
In companies with a 49 per cent foreign holding, more than one Indian company will be allowed to hold the 51 per cent share, unlike the present norm that mandates that a single Indian entity should own and control the entire 51 per cent, a move that will encourage more domestic players to enter the sector. 
 
In case of Railways, 100 per cent FDI will now be allowed in railway infrastructure segments such as electrification, signalling, high speed and suburban corridors. 100 per cent FDI will also be allowed through the Special Purpose Vehicle route to provide last mile connectivity to ports and mines. Further, some railway operations have also been partially opened up to foreign investment. 
 FDI is now allowed in PPP projects, suburban corridors, high speed train systems, and dedicated freight lines. Estimates suggest that the opening of railways to foreign <keyword id="47916" type="UNKNOWN" weightage="20" keywordseo="invest">invest</keyword>ors will add 1-1.5 percentage points to the overall GDP growth. China and Japan are keen to invest in the railways sector. 
 
As a result of these changes, railways transport will be removed from the list of prohibited sectors in the consolidated FDI policy.

Indian Cabinet Approves Raising FDI Cap In Defence To 49 Per Cent, Opens Up Railways

New Delhi, Mar 11 () A parliamentary panel on Wednesday expressed concerns over decline in foreign direct investment (FDI) in the manufacturing sector and recommended to address these issues to make India an attractive destination for investments. The Department-Related Parliamentary Standing Committee on Commerce said the FDI equity inflow in manufacturing is declining and the sector's share in the total FDI inflow in 2018-19 was around 23 per cent "which is very low". It said the "low inflow of FDI in the manufacturing sector defeats the very purpose of Make in India scheme". It recommended the commerce department to take concerted efforts to increase the share of manufacturing sector in FDI inflows. It said that in the past five-and-a-half years (April 2014-September 2019), India received FDI inflows worth USD 319 billion, which is 50 per cent of the total FDI inflow (USD 642 billion) in the past over 19 years since April 2000. It also asked for fast disposal of 51 pending cases of FDI proposals. "The committee, while appreciating the liberal and investment-friendly policies adopted by the government, recommends to take necessary precautions/ steps to ensure that the liberal policies are not exploited by some unscrupulous investors and institute a stringent mechanism to check the misuse of FDI for routing black money in the guise of FDI," it said. Besides, the report stated that a large chunk of FDI inflow is captured by a few states while majority of them witness a minimal inflow of FDI. It recommended the government to take necessary steps to increase the inflow of FDI into the lean states to ensure balanced growth so that there is no regional disparity in development. Further, it asked the department to be vigilant about the domestic sourcing norms and ensure that they are strictly adhered to by the multinational corporations so that the intended benefits are accrued to the target groups. "The committee recommends to address the concerns raised by the domestic retailers and indigenous traders in a structured manner through its retail trade policy which is supposedly under preparation," the report added. The report also said necessary steps need to be taken to ensure that the liberalisation of the coal sector provides the required impetus to the sector. It called for concerted efforts for revival of the industrial sector with focus on mining, manufacturing and electricity sectors given their importance in the economy and to address declining capacity utilisation of the manufacturing sector considering its impact on investment and job creation. On the proposed new industrial policy, it suggested for finalising the policy at the earliest in tune with changing global scenario. On intellectual property rights, the committee stressed the need to further reduce the time for examination and disposal of patents to match the international standard, create awareness among various stakeholders and fill the sanctioned posts of patent examiners and controllers at the earliest. Taking note of the World Bank's Doing Business Report, 2020, which ranks India at 63rd among 190 countries, it said sustained measures need to be taken for further improvement. Further, for start-ups, it suggested to increase registration of start-ups in Government e-Marketplace portal, facilitate establishment of start-ups in those states with dismal record, address the issue of insignificant drawing of funds from the Fund of Funds Scheme and operationalisation of Credit Guarantee Scheme to ease the availability of credit. "Expressing concern over the delay in payment by the PSUs (public sector undertakings) and the government departments to the start-ups, the committee recommended to increase procurement and payment of dues within a stipulated time period," it said. RR HRS

Par panel expresses concerns over dip in FDI in manufacturing sector

New Delhi, Dec 6 () The government has made it mandatory for e-commerce companies like Amazon and Flipkart to submit FDI policy compliance report by statutory auditor by September 30 every year, a move aimed at ensuring that they follow all the norms properly.
 As per the government notification issued on Thursday, e-commerce companies have to obtain statutory auditor report by September-end for the preceding financial year.
 Section 15 of the Foreign Exchange Management Act (FEMA) deals with e-commerce entities.
 "Against Sl. No. 15.2.3, for entry (p), the following entry shall be substituted, namely-(p) e-commerce marketplace entity with FDI shall have to obtain and maintain a report of statutory auditor by 30th of September every year for the preceding financial year confirming compliance of the e-commerce guidelines," the gazatte notification said
 According to government sources, this decision will help in ensuring compliance of FDI policy in the e-commerce sector.
 The move will raise compliance cost for such companies.
 Trader bodies have been raising concern over violation of foreign direct investment (FDI) norms.
 The Confederation of All India Traders asked the government not to give in the demands of global e-commerce players and American industry chambers to amend the recent changes made to the foreign direct investment (FDI) norms for e-commerce.
 It asked the government to make it mandatory for the e-commerce companies to obtain a compliance certificate by March 31, to be able to raise funds.
 The CAIT has often complained about predatory pricing and discounts, along with other violations of the FDI policy, particularly during festive season.
 Commerce and Industry Minister Piyush Goyal had warned e-commerce companies of strict action if they do not halt predatory pricing on their platforms, flouting FDI rules.
 The issue figured in a discussion Goyal had with Amazon India head Amit Agarwal on November 5, sources said.
 A clarification of Press Note 2 issued last December had barred marketplaces from selling products from vendors in which they have an equity interest. They also can't enter into deals with any brand to sell products exclusively on their platforms. These norms came into force in February. RR DP HRS

Govt asks e-commerce firms to file FDI compliance report annually

<keyword id="163329" type="COMPANY" weightage="100" keywordseo="Levi-Strauss-Co">Levi Strauss &amp; Co</keyword>, the US-headquartered maker of the popular <keyword id="3321200" type="UNKNOWN" weightage="100" keywordseo="levis-denim">Levi's denim</keyword> jeans, wants to convert its existing local wholesale entities into retail, for which it has sought the permission of Indian government. Doing so, it has joined the <a href="http://www.businessinsider.in/10-new-insurance-companies-to-start-operations-in-India-soon/articleshow/51585962.cms">long list of foreign brands</a> that are seeking to gain from the changes in India’s FDI policies. 
 
As per reports, Levi Strauss &amp; Co had filed an application with the Department of Industrial Policy and Promotion under the Industry Ministry on April 11, seeking approval that its existing wholesale entities are allowed to engage in direct retailing and ecommerce. 
 
Also read: <a href="http://www.businessinsider.in/New-FDI-rules-to-upset-online-shoppers-no-more-promotional-offers-and-cash-backs/articleshow/51644272.cms">New FDI rules to upset online shoppers; no more promotional offers and cash-backs</a> 
 
Other apparel and casual wear brands that have sought the approval <a href="http://www.businessinsider.in/Samsung-to-soon-apply-for-single-brand-retail-licence-in-India/articleshow/50848515.cms">for direct retail</a> include Pepe Jeans, Adidas and Puma. 
 
It was in November 2015 that the government had relaxed the rules for <a href="http://www.businessinsider.in/Not-everything-can-be-termed-state-of-the-art-says-Indian-government-to-facilitate-FDI/articleshow/51628211.cms">FDI in retail</a>. The new rules allow manufacturers to sell their products through wholesale, retail and ecommerce channel as well. 
 
<a href="https://upload.wikimedia.org/wikipedia/commons/2/2e/HK_Yuen_Long_Plaza_Levi_s_Store_Ground_Floor.JPG">Image source</a>

You Searched For "FDI changes" and got 10 results

Xiaomi's future in India is at stake

BI India Bureau

Government could waive off the 30% sourcing norm for Apple to open stores in India

BI India Bureau

India has slipped to the 10th spot in attracting foreign direct investment

BI India Bureau

Foreign investors can now pump in up to 74 % FDI under automatic route in India's defence sector

PTI

Government fails to attract FDI in Defence Industry, only Rs 56 lakh since Sept last year

BI India Bureau

Govt eases FDI norms in space sector; 100% in making components for satellites

PTI

Indian Cabinet Approves Raising FDI Cap In Defence To 49 Per Cent, Opens Up Railways

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Par panel expresses concerns over dip in FDI in manufacturing sector

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Govt asks e-commerce firms to file FDI compliance report annually

PTI

Levi Strauss wants to directly retail online and offline, writes to the government

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