Govt plans FDI centres abroad to boost inflows

NEW DELHI: In order to boost FDI flows into the country, the government has decided to set up FDI assistance centres across the globe. These facilitation centres, to be set up in all major countries, will provide a ground for foreign investors to interact with Indian officials.

They would be educated on how to go about investing in India, provide sector-specific details and clarifications on various laws relating to investment in the country.

To start with, the Department of Industrial Policy and Promotion (DIPP) has framed the policy for setting up facilitation centres in 10 countries. “The policy has been sent to the finance ministry for clearance as huge expenditure is required for setting up such facilitation centres. We also need enough funds to sponsor tours of officials so that they visit these countries and educate investors,” a DIPP official said. Once the policy is through, the DIPP would establish links with the respective embassies for facilitation of the scheme.

According to sources, the ministry of external affairs (MEA) is supportive of the move as it would encourage FDI flow into the country. The objectives of the country-specific facilitation centres would be attending investment queries from individual investors, promoting JVs and business collaborations, encouraging visits of business delegations, organising road shows, domestic and international publicity for marketing India and providing incubation services to investors.

Under the scheme, 10 investment promotion centres would be established in the US, Japan, Taiwan, UK, Germany, Singapore, France, South Korea, Switzerland and Italy. Industry chambers like the Confederation of Indian Industries (CII) and FICCI would also be associated in the functioning of the centres. “There is a possibility that the chambers may also become stakeholders in the project,” an official said.

According to officials, there is a gap between the country’s potential to attract FDI and actual FDI inflows. This is often due to information on the India story not reaching foreign investors. The facilitation centres will aim to remove the shortcoming through active involvement of the Centre, states and industry bodies in promotional activities.

FDI inflow in 2006-07 was around $5 billion, out of which about 70% was through M&A and rest 30% through active greenfield investments.