India’s Minister of Commerce and Industry and Civil Aviation, Suresh Prabhu, said that the government will come up with a proper mechanism to aid global funds looking to invest in Indian infrastructure and startups.
Speaking to the Press Trust of India, Prabhu said that under the new regulatory framework, foreign investors will face less paperwork and get detailed information about the process.
The announcement comes after several meetings with sovereign wealth funds, insurance funds, and pension funds from countries like Japan, Australia, Canada, Singapore, and South Korea.
During the meetings, the investors from Japan had reportedly voiced their concerns related to regulatory burden and long documentation processes.
Prabhu added that currently global investors and companies are facing difficulties while investing in India. Due to this, the central government is considering a more transparent system to aid the global investment process.
He also added that a new committee has been set up under the Department of Industrial Policy and Promotion (DIPP) secretary, which will be responsible for exploring ways to make the regulatory processes more lenient.
According to the minister, in order to avoid these issues, Japanese and Indian lawyers along with the government will be preparing a set of standardised documents.
Earlier in May, reports stated that the government is looking to introduce a law to promote and protect foreign investments in India.
In July, among the ongoing speculations related to ecommerce policy, the government also suggested having a separate group to monitor any violation of the Foreign Direct Investment (FDI) policy by online retail platforms.
India’s FDI Flow This Year
According to a report by DIPP, the total FDI investments in India stood at $12.75 Bn (INR 91,008 Cr), during the April-June 2018 quarter.
The report added that India received the maximum FDI equity inflows from Singapore with $6.52 Bn (INR 46,436 Cr), followed by Mauritius at $1.49 Bn (INR 10, 634 Cr), and Japan, which contributed $0.87 Bn (6,210 Cr).
With an aim to bolster the growth of the Indian startup ecosystem, last year, the government had also made amendments to the FDI policy, under which it included a section for the Indian startups.
Under this amendment, startups were allowed to raise 100% funding from Foreign Venture Capital Investors (FVCIs) via convertible notes.
Last week, the central government also hosted the annual ‘Startup India Venture Capital Summit’ in Goa which saw participation from several countries including Australia, China, Hong Kong, Japan, Singapore and US.
The global VC fund managers and the government came together to discuss ways to further promote the startup ecosystem.
World Bank Group member, International Finance Corporation and Indian Private Equity and Venture Capital Association (IVCA) were partners in this initiative.
[The development was reported by ET]