News Analysis India

Tag: FDI

  • Union government mulls permitting foreign investment in LIC

    By PTI

    NEW DELHI: The government is mulling allowing foreign direct investment (FDI) in the country’s largest insurer LIC, a move which would help overseas investors take part in the company’s proposed mega IPO, sources said.

    The proposal is under discussion between the Department of Financial Services and the Department of Investment and Public Asset Management (DIPAM).

    “Discussions have been going on for the proposal for the last few weeks. It would also go for inter-ministerial discussions and would also require Cabinet nod,” a source said.

    According to the current FDI policy, 74 per cent foreign investment is permitted under the automatic route in the insurance sector.

    However, these rules do not apply to the Life Insurance Corporation of India (LIC), which is administered through a separate LIC Act.

    As per Sebi rules, both FPI and FDI are permitted under public offer.

    However, sources said since LIC Act has no provision for foreign investments, there is a need to align the proposed LIC IPO with Sebi norms regarding foreign investor participation.

    The Cabinet had in July approved the initial public offering (IPO) of LIC.

    The DIPAM had in January appointed actuarial firm Milliman Advisors LLP India to assess the embedded value of LIC ahead of the IPO, which is touted to be the biggest public issue in Indian corporate history.

    The government expects to come out with the LIC IPO by the end of the current fiscal.

    Up to 10 per cent of the issue size would be reserved for policyholders.

    The government has already brought in the required legislative amendments in the LIC Act for the proposed IPO.

    Deloitte and SBI Caps have been appointed as pre-IPO transaction advisors.

    As many as 16 merchant bankers are in the race to manage the mega initial public offering.

    These bankers will be making a presentation before DIPAM during the week.

    Seven international bankers, including BNP Paribas, Citigroup Global Markets India and DSP Merrill Lynch Ltd (now known as BofA Securities), will make presentations.

    The listing of LIC will be crucial for the government to meet its disinvestment target.

    The government aims to mop up Rs 1.75 lakh crore in the current fiscal from minority stake sales and privatisation.

    Of the Rs 1.75 lakh crore, Rs 1 lakh crore is to come from selling the government’s stakes in public sector banks and financial institutions.

    The remaining Rs 75,000 crore would come as CPSE disinvestment receipts.

  • As border cools, Chinese FDI set to flow in again

    By Express News Service
    NEW DELHI: With border tensions with China appearing to be ebbing, the Centre has decided to clear as many as 45 Chinese investment proposals worth over Rs 20,000 crore. Confirming the development, officials in the finance and commerce ministries told TNIE that these FDI proposals include high-profile ones that have been stuck due to tensions between the two countries. These include the proposal by Chinese auto giant Great Wall Motors to manufacture electric vehicles in India. 

    Other notable proposals include the one by SAIC Motor Corp and projects in the electronics and power sectors. SAIC, which started selling cars in India in 2019 under its British brand MG Motor, has already invested $400 million in India and wants to bring in  more investment bolster its production capacity.Great Wall plans to invest $1 bn in India over the next few years.

    “There are about 45 proposals in the pipeline awaiting approvals. The aggregate value of these proposals is Rs 20,000 crore. Now that talks have resumed and  tension has eased, those deals are likely to go ahead,” said a commerce ministry official.

    Officials clarified that it is not just Chinese companies but several proposals by Hong Kong and Singapore-based companies were also stuck in the process, including a large bunch of private equity investors which were looking to invest in the Indian startups.

    “There are about one dozen start-up deals which are stuck, because of want of security clearance. Once it is done, it will bring a big relief for startups which were looking for liquidity in the post Covid period,” said an official. India had tightened the rules for FDI proposals from China amid standoff between the armies of the two nation at the border. India had also banned a numbers of Chinese apps citing security concerns. 

  • New rules coming for e-commerce policy and FDI

    The central government may soon introduce new rules regarding e-commerce policy and FDI. In this regard, the officials of the Confederation of All India Traders Association (CAT) met on Thursday through video conferencing with Union Commerce Minister Piyush Goyal.

    CAT’s National Vice President Amar Parvani and State Executive President Vikram Singh Dev said that in this meeting it was said that under the new rule, e-commerce business will be made more and more friendly by the merchants and consumers of the country.

    Also, a business model with a similar competition in this business will also be ready. This will benefit more and more traders. He said that it clearly stated that no one should dare to violate the law and the rules and if it does, then they should be prepared to face the consequences.

  • Kat celebrates Retail Democracy Day in protest against foreign e-commerce companies

    The Confederation of All India Traders Association (CAT) has opened a front against foreign e-commerce companies. CAT celebrated Retail Democracy Day against these companies on Tuesday. CAT’s national vice-president Amar Parvani and state executive president Vikram Singhdev said that FDI policies and laws are constantly being violated in India’s e-commerce and retail business by e-commerce companies funded by foreign or foreign investment.

    Due to this, business organizations associated with CAT have submitted a memorandum in the name of Prime Minister Narendra Modi to the district collectors in 514 districts of the country along with Chhattisgarh. He said that in this memorandum it has been said that a separate e-commerce policy should be set up for the planned operation of e-commerce in the country. Also, an e-Commerce Regulatory Authority should also be set up. CAT has also said in the memorandum that the vocals for local and self-reliant should be adopted at the ground level.

  • Modi meets foreign investors today as India looks to attract investments for infrastructure

    Prime Minister Narendra Modi will woo the world’s 20 largest pension and sovereign wealth funds at a virtual round table Thursday as India looks to attract investments for its ambitious Rs 111 lakh crore infrastructure investment pipeline for the next five years.

    The Modi government’s efforts to attract foreign investments into the infrastructure space comes at a time when around half of the proposed infrastructure investments by 2025 will have to come from private and foreign investors.

    To attract these funds to invest in India, it has already announced tax exemptions in this year’s budget to these long-term funds investing in infrastructure, making their income exempt from long-term capital gains, interest and dividend tax.

    The call for investment

    The virtual global investor roundtable, organised by the Ministry of Finance and the National Investment and Infrastructure Fund, will be attended by global investors who represent regions like the US, Europe, Canada, Korea, Japan, Middle East, Australia and Singapore, and have an asset under management of $6 trillion, the Prime Minister’s Office said in a statement.

    The roundtable will also be attended by Indian business leaders like Mukesh Ambani, Ratan Tata, Deepak Parekh, Nandan Nilekani and Uday Kotak, and Finance Minister Nirmala Sitharaman and Reserve Bank of India Governor Shaktikanta Das.

    It will be followed by individual meetings of the investors with the PM over the next couple of weeks.

    Repeated efforts

    This is not the government’s first attempt to woo foreign investors.

    Just ahead of PM Modi’s visit to the US last year, his government had announced a massive reduction in corporate tax rates to make India competitive vis-a-vis other Southeast Asian economies. The rates were brought down to as low as 15 per cent (effective tax rate of around 17 per cent) for new companies in the manufacturing sector.