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GROUP MEMBERS
O ASHISH JADHAV
O ROHAN ACHREKAR O KALPESH WORLIKAR O ROHAN MADANE
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59 18 36 44 57 29 38
O SHWETA TARALE
O GAURAV PIMPALE O NILESH PATIL O ROSTAN DIAS
O GAYATRI LIMBACHIYA
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O Demand Potential
O Revenue Potential O Stable Policy Environment/Political
Stable democratic environment over 60 years of independence Large and growing market World class scientific, technical and managerial manpower Cost-effective and skilled labour Abundance of natural resources Large English speaking population Well-established legal system with independent judiciary Developed banking system and vibrant capital market Well developed accountancy, legal, actuarial and consultancy profession
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WHAT IS FDI ?
Foreign direct investment (FDI) in its classic form is defined as a company from one country making a physical investment into building a factory in another country.
Include investments made to acquire lasting interest in enterprises operating outside of the economy of the investor.
Generally speaking FDI refers to capital inflows from abroad that invest in the production capacity of the economy
O FDI can not only bring capital to an economy,
but also transfer knowledge, technology and skills, as well as generate employment and trade.
O In FDI, Business is very High.
enterprise and a foreign affiliate which together form a multinational corporation (MNC).
Foreign Direct Investment (FDI) is a driving force
markets.
Instead, FDI refers more specifically to the
Foreign Direct Investment (FDI) is permitted as under the following forms of investmentsO Through financial collaborations. O Through joint ventures and technical
collaborations.
O Through capital markets
ADVANTAGES OF FDI
O Increase in Domestic Employment/Drop in
unemployment
O Investment in Needed Infrastructure.
O New Technology and Know How Transfer. O Increased Capital Investment. O Targeted Regional and Sectoral Development.
DISADVANTAGES OF FDI
O Technological Dependence on Foreign
Technology Sources.
O Disturbance of Domestic Economic Plans in
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What is FII?????
O institutional means that the business or company
doing the investing is not a single, private individual who chooses to put money into a project or scheme.
O a foreign institutional investor (FII) is a legal entity
such as an investment fund or mutual fund that puts money into a business venture or project in a country other than the one in which the investor lives or is based.
FIIs can individually purchase upto 10% and collectively upto 24% of the paid-up share capital of an Indian company This limit of 24% can be increased to sectoral cap/ statutory limit applicable to the Indian company by passing a board resolution/shareholder resolution FIIs can purchase shares through open offers/private placement/stock exchange Shares purchased by FII through stock exchange cannot be sold through a private arrangement Proprietary funds, foreign individuals and foreign corporates can register as a subaccount and invest through the FII. Separate limits of 10% / 5% is available for the sub-accounts FIIs can raise money through participatory notes or offshore derivative instruments for investment in the underlying Indian securities FIIs in addition to investment under the FII route can invest under FDI route
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O O
O O
Advantages of FII
O
O O O O O O O
O O
Enhanced flows of equity capital FIIs have a greater appetite for equity than debt in their asset structure. It improve capital structures. Managing uncertainty and controlling risks. FII inflows help in financial innovation and development of hedging instruments. Improving capital markets. FIIs as professional bodies of asset managers and financial analysts enhance competition and efficiency of financial markets. Equity market development aids economic development. By increasing the availability of riskier long term capital for projects, and increasing firms incentives to provide more information about their operations, FIIs can help in the process of economic development. Improved corporate governance. FIIs constitute professional bodies, improve corporate governance.
FDI
FII 1. It is generally short-term investment 2. Investment in financial assets 3. Aim is to increase capital availability
1. It is long-term investment
2. Investment in physical assets 3. Aim is to increase enterprise capacity or productivity or change management control 4. Leads to technology transfer, access to markets and management inputs 5. FDI flows into the primary market
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FDI
Entry Routes for Investment
Automatic route
Government route
NBFC (minimum capitalization norms) IT / ITes Financial services(a) Telecom Sector (74% cap)(a) Insurance (26 % cap)(a) Real Estate(a) Special Economic Zones Infrastructure Shipping Manufacturing sector Hotels and tourism
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25000
Mauritius, Singapore and Cyprus are the favorite jurisdictions for investment into India
FII Statistics
FII Investment
200000
150000 100000 50000 0
-50000
-100000 Total (INR Cr.)
Total Inflows
Others 19% Mauritius 42%
Japan 4% Netherlands 4%
USA 7%
Singapore 10%
O Sophisticated international
telecommunication service
O Abundance of professional service
offices in Mauritius
O International banks including HSBC, Barclays
INVESTMENT PROTECTION
O Signed Investment Promotion & Protection
O O O O O
Agreement (IPPA) Provides for free repatriation of investment capital & returns Guarantee against expropriation Rule regarding treatment of investors Compensation for losses in case of war, armed conflict or riot Arrangements for settlement of disputes between investors and contracting states
based Investment are taxable in Mauritius O Companies are subject to corporate tax of 15% + deemed credit O Effective tax comes down to 3% or NIL O Also no capital gain tax, no withholding tax on dividends and interest paid to non-residents by Mauritius entities.
was released in June 2010 O Now proposed that where the tax treatment under a DTAA is more beneficial to a tax payer than the treatment under the code, the terms will prevail
However, in terms of the code, the commission may declare the tax treatment of a tax payer under a DTAA to be not applicable under general anti avoidance rules
lotteries,etc.
O Gambling and betting including casino O Manufacturing of Cigars, cheroots,
tobacco
substitutes
FDI
Entry Routes for Investment
Automatic route
Government route
FDI
SECTORAL GUIDELINES
AIRPORTS
Foreign Investment up to 100% is allowed in green field projects under automatic route Foreign Direct Investment is allowed in existing projects - up to 74% under automatic route - beyond 74% and up to 100% subject to Government approval
route for manufacture of drugs and pharmaceuticals (The following is the current position)
O FDI proposal for the manufacture of licensable
TELECOM
FDI in basic and cellular, unified access services, national/ international long distance , V-Sat, public mobile radio trunk services , global mobile personal communications services - Automatic up to 49% - FIPB beyond 49% but up to 74% Manufacture of telecom equipments Automatic up to 100%.
INSURANCE
However, license from the Insurance Regulatory & Development Authority (IRDA) has to be obtained
There is a proposal to increase this limit to 49%
TRADING
O 100 % FDI PREMITTED IN
FOLLOWING CASE O EXPORT O CASH AND CARRY WHOLESALE TRADING O BULK IMPORT
O Highways
O Tunnels O Ports O harbour
PRINT MEDIA
FDI upto 100% in publishing/printing scientific & technical magazines, periodicals & journals FDI upto 26% in publishing news papers and periodicals dealing in news and current affairs. All investments are subject to the guidelines issued by the Ministry of Information and Broadcasting
BROADCASTING
FDI would be 26% for news and current affairs tv channel and fm radio FDI less than 26% would be through automatic route .investment of 26% and above will require government approval
INFRASTRUCTURE
Electricity Generation (except Atomic energy) Electricity Transmission Electricity Distribution Mass Rapid Transport System Roads & Highways Toll Roads Vehicular Bridges Ports & Harbors Hotel & Tourism
IMPORTS
HELPS IN INCREASING A COUNTRYS
EXPORT
HELPS IN INCREASE THE REAL INCOME TRANSFER OF TECHNOLOGY
DOMESTIC MONOPOLIES
INVESTMENT
GROWTH
FDI in Retail
O Current
Single brand retail -51 % Multi brand NIL O Proposed
Quality???
O Kirana Stores
Over regulation Ensure they get better environment to operate Create a watching body to see farmers are not exploited and get fair prices Policy for Predatory pricing Upgrade, modernize existing retail system alongside
THANK YOU..!!!