Mayaram panel considering 2 categories for foreign investment

Tags: News
In a major overhaul of foreign investment regime, the government is considering splitting overseas inflows into two categories -- Foreign Portfolio Investment (FPI) and Foreign Direct Investment (FDI)-- with a minimum composite cap of 49 per cent.

The proposal, which is being considered by the Arvind Mayaram panel, envisages an aggregate automatic limit of 24 per cent of FPI, which may be raised up to the extent of FDI permitted under the automatic route, sources said.

The individual investment limit under the FPI, which will comprise Qualified Foreign Investors (QFIs) and Foreign Institutional Investors (FIIs), has been proposed up to 10 per cent of the paid up capital in a listed company.

Any individual investment above 10 per cent, as per the proposal, will be treated as FDI.

In case the company is not listed, the FPI investment would be deemed as FDI, sources said, adding that there will be separate guidelines for investment by non-resident Indians.

The government had set up a four-member committee headed by Economic Affairs Secretary Mayaram to define FDI and FII and remove the ambiguity between them. The Committee is expected to finalise its report by end of this month.

Finance Minister P Chidambaram in his Budget speech had proposed to follow the international practice with regard to the definitions.

The recommendations, sources said, will be applicable with prospective effect and hence will not impact the existing investments.

As per the proposal, an investor will have the option to invest as either FPI or FDI, but not both.

EDITORIAL OF THE DAY

  • Common test will safeguard sanctity and bring accountability to medical profession

    Recalling its order of 2013, the Supreme Court paved the way for the all-India common entrance test, the national eligibility-cum-entrance test (NEET)

FC NEWSLETTER

Stay informed on our latest news!

TODAY'S COLUMNS

Amita Sharma

Political rhetoric makes for counter poetry

Poetic flourishes flavour politics. Ghalib and Hafez flowed profusely to ...

Zehra Naqvi

Watch your words, for they can kill

You must’ve heard the ph­rase ‘if looks could kill’. Ever ...

Dharmendra Khandal

Biodiversity day has come and gone. Yet again

Every year on May 22, world celebrates international biodiversity day. ...

INTERVIEWS

William D. Green

Chairman & CEO, Accenture