New Delhi, March 31 (IANS) India Thursday announced measures to ease investing norms for foreign firms in the updated foreign direct investment (FDI) policy by allowing overseas companies in existing joint ventures to operate separately in the same business segment.
Other steps announced by the ministry of commerce and industry include allowing conversion of non-cash items such as import of capital goods, pre-operative or pre-incorporation expenses (including payments of rent) to equity.
Earlier only royalty, lump-sum fee and external commercial borrowings were allowed to be converted into equity.
The policy also simplified guidelines for downstream investments by classifying companies into only two categories – firms owned or controlled by foreign investors and those owned and controlled by Indian residents.
It also allowed overseas investment for developing and production of seeds and planting material.
‘There is a felt need to attract fresh investment and technology inflows into the country, as also to reduce the levels of state intervention in the commercial sphere,’ said a commerce ministry statement.
‘It is expected that these measures will promote the competitiveness of India as an investment destination and be instrumental in attracting higher levels of FDI and technology inflows into the country.’
