Union Commerce and Industry Minister Anand Sharma released the final document of FDI Policy Framework.
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It would now comprise the single document on FDI policy and mark the inception of a whole new chapter on FDI policy.
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Meanwhile, he said that the current exercise had been started with the goal of incorporation of all prior regulations on FDI.
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That contained in Foreign Exchange Management Act (FEMA), RBI circulars, and various Press Notes into one consolidated document.
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This is so as to reflect the current regulatory framework.
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Moreover, having a single policy platform would also ease the regulatory burden for Government.
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The intention of this exercise is not to make changes in the extant guidelines, but to deal with them comprehensively.
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The government stated that it was considering permitting FDI in limited liability partnership (LLP) firms.
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It was also considering to clearly define whether shares and bonds issued to overseas investors could be treated as foreign direct investment.
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On the other hand, the government may also do away with Schedule IV of the FEMA that deals with sale and purchase of shares and debentures by NRIs and overseas corporate bodies on non-repatriable basis.
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Earlier, it was said that India”s Foreign Direct Investment (FDI) inflows reduced by 25 % to $2.04 bn in January 2010 as compared to the corresponding period of the previous year, breaking a trend of positive growth in the previous 3 consecutive months.
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An official said there is no specific reason why the inflows in January inched down. India”s total FDI by the end of the current financial year, will not be more than last financial year”s.
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However, last year in January 2009, FDI inflows were $2.73 bn. India attracted FDI of $2.33 bn in October 2009, about 56 % jump over the same period last year, while in November FDI surged by 60 % to $1.73 bn.
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Previously, as the response from investors did not warrant such a move, the government does not have any plan to increase the cap of foreign investments in bonds stated a top Finance Ministry official.
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The existing limit is not being used up for a long time while there is no proposal to raise the foreign institutional investment (FII) debt limit.
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Currently, the government allows foreign investments of up to $15-billion in corporate bonds and up to $5-billion in government bonds.
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India received $1.5 billion foreign direct investment (FDI) in December 2009 that is an increase of over 10% over that in the same month of previous year.
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FDI was $1.36 billion in December 2008.
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The overseas inflows decreased marginally to $20.9 billion in April-December compared to $21.15 billion in the corresponding period last year.
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In addition, Commerce and Industry Minister Anand Sharma stated that the government plans to introduce a single FDI document by end-fiscal, with a view to simplify foreign direct investment (FDI) process, and is currently discussing the various modalities.
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He said they have put this document for discussions with all stakeholders to invite their comment which is likely to close by January 31.
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By March 31, they will have single FDI document to ensure simplification, easy comprehension and predictability.
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Moreover, Commerce and Industry Minister Anand Sharma stated that India”s share in the global Foreign Direct Investment has almost doubled to 2.45% in 2008.
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India was fourth in 2008, in terms of FDI inflows, among developing countries with reference to UNCTAD World Investment Report (WIR) 2009.
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However, earlier, in order to attract $50 billion of foreign direct investment (FDI) annually by 2012, the Centre is creating an investor friendly environment, to keep up with the economic growth and build infrastructure.
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It is said that the government will aim at $50 billion annual FDI flows by 2012 and $100 billion by 2017 whereas last year the FDI inflows were $35 billion and in the H1 of 2009-10, the FDI inflows were around $15 billion.
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On the other hand, the government approved 17 foreign direct investment (FDI) proposals worth Rs 1,158.78 crore where among the major proposals are the FDI applications of ArcelorMittal and ductile iron pipe maker Electrosteel Castings.
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ArcelorMittal, with an FDI of Rs 503.37 crore, plans to infuse foreign equity into a company engaged in manufacturing cold-rolled semi-finished iron and steel products.
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Foreign direct investment (FDI) is a measure of foreign ownership of productive assets, such as factories, mines and land. Increasing foreign investment can be used as one measure of growing economic globalization.
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Savings accounts are accounts maintained by retail financial institutions that pay interest but can not be used directly as money ( for example, by writing a cheque).
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These accounts let customers set aside a portion of their liquid assets while earning a monetary return..
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