GUIDELINES FOR INDIAN DIRECT INVESTMENT IN JOINT VENTURES AND WHOLLY OWNED SUBSIDIARIES ABROAD

CRITERIA

7.1 In considering an application under category "B", the Committee shall, inter alia, have due regard to the following:

a) The financial position, standing and business track record of the Indian and foreign parties;

b) Experience and track record of the Indian party in exports and its external orientation;

(c) Quantum of the proposed investment and the size of the overseas venture in the context of the resources, net worth and scale of operations of the Indian party;

(d) Repatriation by way of dividends, fees, royalties, commissions or other entitlements from the foreign concerns for supply of technical know-how, consultancy, managerial or other services within five years with effect from the date of first remittance of equity to the foreign concern or the date of first shipment of equity exports or the due date for receipt of entitlements which are to be capitalised, whichever is earlier.

(e) Benefits to the country in terms of foreign exchange earnings, two way trade generation, technology transfer, access to raw materials, intermediates or final products not available in India;

(f) Prima facie viability of the proposed investment.

Provided that the proposals for overseas direct investment in the financial sector under Category "B" shall also conform to the requirements laid down for this sector at para 5.1 above.

7.2 Indian financial and banking institutions considering to support the venture will examine independently the commercial viability of the proposal.

Guidelines for Indian Direct Investment in Joint Ventures and Wholly Owned Subsidiaries Abroad

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