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The move follows a decision by the government in March to process and decide FDI proposals from these countries in specified manufacturing sectors or activities within 60 days.
However, it has stated that in these cases, the majority shareholding and control of the investee entity will be with resident Indian citizens/or resident Indian entity owned and controlled by Indians at all times.
The 40 sub-sectors are under six broad sectors – capital goods manufacturing, electronic capital goods and electronic component manufacturing, polysilicon (and ingot-) wafers, advanced battery components, rare earth permanent magnets, and rare earth processing.
The sub-sectors included manufacturing of insulation items; castings and forgings required in thermal/hydro/nuclear power plants; machine tools; display components (plasma, polymer, LCD, LED); camera module; electronic capacitors; speakers and microphones for ICT products; Li-ion batteries; wearables; and rare earth metal, alloy and magnet making facility.Further, in the SOP, the government has also rolled out reporting guidelines for investments into India from a company having any direct or indirect ownership by a citizen or an entity of a country sharing a land border with India.
“The reporting under these guidelines will be governed under the Foreign Exchange Management (Mode of Payment and Reporting of Non-debt Instruments) Regulations, 2019, and the information will be accessible by the Reserve Bank of India (RBI),” the DPIIT’s SOP said.
The onus of reporting will be on the Indian investee firm, which has to submit the information or documents to the Department for Promotion of Industry and Internal Trade (DPIIT).
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“The reporting is to be made prior to the inward remittance of foreign capital. In cases which do not involve foreign capital inward remittances, the reporting is to be made prior to execution of the relevant transactions, including issuance/transfer of capital instruments, as the case may be,” it added.
According to the reporting norms, the investor will have to provide details such as shareholding pattern, beneficial owners, organisation and group structure, promoters, board composition and key managerial personnel, along with corresponding citizenship status, and details of control rights.
The Indian investee entity needs to disclose incorporation details, shareholding pattern, and existing or proposed shareholding by a land-bordering country entity.