The March issue of Corporate Dealmaker magazine will focus on dealmaking in emerging markets, especially China, India and Latin America. One of our goals is to help the many middle-market companies that want to expand in these vibrant economies but can't draw on the level of resources available to global giants like IBM Corp. or General Electric Co.
We thought it would be useful to readers if we post some of our initial research online. You're now reading the first in a series of such posts, this one on India and the recently revised rules for foreign direct investment there.
The new rules, approved by the government on Jan. 30, have been in the works for two years. The overall effect is to loosen restrictions in sectors where the government would like to attract foreign capital, but of course different sectors fare differently. And the rules can be complex.
In retailing, for example, current "guidelines permit 51% foreign investment in retail operations with prior approval from FIPB ('Foreign Investment Promotion Board') provided the products are under a single brand and are sold under the same brand internationally," according to
an article in the Economic Times. Done in conjunction with E&Y, the article is one of a useful series looking at different sectors. The author also argues that the government should allow 100% foreign ownership in retail.
In the airline industry, Urdustan.com
reports that India will allow up to 100% foreign investment in the maintenance, repair and overhauling of aircraft.
India is also relaxing rules for the construction and civil aviation industries. The Economist
tells us foreign-Indian ground-handling joint ventures, such as Singapore-based SATS' venture with Air India, will now be free to increase their foreign stakes.
Good news for radio listeners, too, as Indian Television Dot Com Pvt. Ltd.
says the Telecom Regulatory Authority of India, or Trai, suggested an increase in the FDI cap for private FM radio broadcasters and also recommended that they be permitted to broadcast news.
A note for those interested in
nondirect investment. WisdomTree is
launching the first India-only ETF -- the WisdomTree India Earnings Fund. They launched it
Friday.
Watch for more posts like this as we continue our research. -
Baz Hiralal
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