Foreign Funding For Businesses in India
Foreign Direct Investment is an investment made by a foreign entity (a firm or an individual)
into the business interests of another country in the form of controlling ownership. The
economic liberalization of 1991 led India to become a fast-growing major economy. Since
then, the regulatory environment pertaining to foreign investment in India has consistently
been eased. The Government of India has reformed overseas funding policies to
encourage FDI Funding in the country.
How to get foreign funds or overseas funds for business? Well, obtaining foreign funding in
India for your investment prospects can be an overwhelming task. A lack of connections and
the long process is enough to bog anyone down. This is where we come in. We facilitate
foreign investment in an Indian company by connecting overseas investors to investment
opportunities in the country.
Looking for funding through FDI? Look no further!
You can think of us as an FDI agency that helps you take your business opportunity across
country borders and helps investors meet best funding opportunities in India When it comes
to foreign funding for businesses in India, we are experts. We help you through the entire
procedure by simplifying things and taking care of complex undertakings.
Overseas funding contributes much more than just monetary funds. They bring with it more
employment opportunities, new technology, managerial expertise, and improved
infrastructure.
There are three types of investors of foreign funding for businesses in India:
1.
Individual
o
o
o
2.
Company
o
o
o
3.
Financial institutions
Pension and Provident Fund
Foreign Venture Capital Investors
Sovereign Wealth Funds
Foreign Trust
Non Resident Indians (NRI’s) and Persons of Indian Origin (PIO’s)
Foreign Institutional Investors
o
o
o
Partnership and Proprietorship Firm
Private Equity Funds
Others
India has flourished to become one the largest economies in the world today. Foreign
companies are looking to invest here to take advantage of easy investment policies and
privileges like tax exemptions, etc. and relatively cheaper employment wages. Foreign
funding in India is a critical driver of economic growth and development.
Foreign direct investment can be carried out in many ways, including the opening of a
associate company or a subsidiary, acquiring a controlling interest in an existing firm, by the
means of merger or joint venture with a company.
FDI policy allows foreign funding for businesses in India
under two routes:

1. The Automatic Route
Under this route, Foreign Direct Investment up to 100% is allowed and no Central
Government permission is required except the following. The services/activities listed
below require prior approval of the government.
o
o
o
o

Where more than 24% foreign equity is proposed to be inducted for
manufacture of items reserved for the Small Scale sector.
FDI in sectors/activities to the extent permitted under Automatic Route does
not require any prior approval either by the government or the Reserve Bank
of India .
The investors are only required to notify the Regional Office concerned of the
Reserve Bank of India within 30 days of receipt of inward remittances and file
the required documents along with form FC-GPR with that Office within 30
days of issue of shares to the non-resident investors.
Where provisions of Press Note 1 (2005 Series) issued by the Government of
India are attracted.
2. The Government Route
Sectors and activities that are not covered under the automatic route require an
approval from the Government of India and are considered by the Ministry of Finance
and Foreign Investment Promotion Board (FIPB).
Most recently, the government has made several reforms in FDI norms in sectors like
aviation, single-brand retail, digital marketing, and contract manufacturing.
Invest In India
India continues to offer a thriving environment for foreign investments. After economic
liberalization began in 1991, the Government of India regularly eased foreign investment
policies in order to encourage inflows and facilitate economic development of the country.
Today, India is one of the fastest growing economies in the world with leading investors
ranking India as the most attractive market.
Foreign companies and individuals are looking to invest in India because of easy policies and
special incentives like certain tax exemptions. The country gives investors a plethora of
compelling reasons to invest in India.
1.
Largest youth population in the world
India’s enormous population is no secret. The country is expected to have the world’s
largest youth population by 2020. India is home to the third largest group of scientists
and technicians in the world. With a large young population, high levels of education,
skilled workforce and a strong work ethic, India is set to become a global player.
2.
Huge domestic market
India’s domestic consumption, led by the private sector has played a significant role
in the country’s growth. An emerging middle class and more people entering the
workforce is the biggest driver of the increasing consumption in India. Private
consumption is said to become four times by 2025.
3.
Flourishing economy
The world’s 7th largest economy by nominal GDP with the third largest Purchasing
Power Parity (PPP), India has emerged as an attractive destination for foreign
investment. It successfully survived the global downturn of 2008-09 and has
maintained a steady growth rate over the years. A stable economy has resulted in
foreign investors to invest in India.
4.
Diverse sectors
The country offers abundant investment opportunities across different sectors. From
consumer goods to infrastructure and IT to agriculture, India has substantial room for
economic development. It is a good time to invest in India.
5.
Governance
The government of India has been very accommodating when it comes to foreign
investments. New economic reforms and amendments to foreign investment
policies have alleviated the FDI trajectory. To make India more investor-friendly, the
government has undertaken reforms and simplified investing conditions to encourage
foreign investment in different sectors. As of February 2019, the government of India
was actively working on a plan to achieve its goal of US $100 billion worth of FDI
inflows to invest in India.
6.
Thriving infrastructure
Taking a step towards progress, more than $1.5 tn investments have been planned for
infrastructure in the next two decades. The next three decades will witness more than
350 mn Indians moving into cities. The Government of India has mapped
infrastructure initiatives across different sectors, from railways to highways and
industrial corridors to smart cities.