Rare earths, PCBs among 40 sub-sectors on FDI fast track

New Delhi: India has identified rare earth magnets and printed circuit boards among 40 sub-sectors for expedited clearance within 60 days of foreign direct investment (FDI) proposals from China and other countries sharing land borders with the country.As per the updated standard operating procedure (SOP) for processing FDI applications, the government has also rolled out reporting guidelines for investments in 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 investor also must 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 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 to the Reserve Bank of India (RBI),” Department for Promotion of Industry and Internal Trade (DPIIT) said in the updated SOP.

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.

Last month, the government eased FDI norms for foreign companies having a Chinese/Hong Kong shareholding of up to 10% (or non-controlling stake), enabling them to invest in India under the automatic route, subject to applicable sectoral conditions and FDI caps.

However, the DPIIT said in these cases, the majority shareholding and control of the investee entity will be with resident Indian citizens/or resident Indian entity-owned and always controlled by Indians.