FDI beyond 24% in micro units to require
FIPB nod
New Delhi, Source : Business Standard

Any foreign investment in excess of 24 per cent in an industrial unit, which manufactures items reserved for micro and small enterprises (MSEs), will require prior approval of the Foreign Investment Promotion Board (FIPB), according to Press Note 6 issued by the government.

Moreover, any industry which manufactures items reserved for MSEs will require an industrial licence subject to some general conditions, including export of at least 50 per cent of new or additional production over a period of three years. This was notified by the government in a new Press Note today. Non-MSE units engaged in the production of 21 reserved items like bread, pickles and aluminium utensils will come under this notification.

The Press Note also allows enactment of the Micro, Small and Medium Enterprises Development Act of 2006, which removed the ceiling of 24 per cent foreign equity in these units. Earlier, any unit having more than 24 per cent foreign direct investment (FDI) had to withdraw its registration as a small-scale unit and obtain industrial licence. However, the new Press Note removed this process which will help in attracting more FDI into the cash-starved MSEs. The Act defined micro units in the manufacturing sector as those where investment in plant and machinery does not exceed Rs 25 lakh, while small units as those investing between Rs 25 lakh and Rs 5 crore.

In the services sector, the investment in equipment up to Rs 10 lakh is defined as micro enterprises and Rs 10 lakh to Rs 2 crore as small units. The new Press Note is sixth in a series in 2009. Some of the earlier press notes like 2, 3 and 4 had raised a controversy relating to the manner of calculating FDI and downstream investment in subsidiaries. The MSE sector in India has around 26 million units which employ about 60 million people.

Nissan looks at sourcing for non-compact cars
from India
Mumbai, Source: The Hindu Business Line

Nissan Motor India is steadily progressing on its business plans in India — be it sourcing, hiring or identifying production bases. Even for the non-compact car segment, the Japanese auto major has found India to be an attractive and cost-effective sourcing point, according to company officials.

A senior Nissan official said the upcoming Oragadam plant near Chennai is being perceived as the hub for sourcing spares for Nissan’s operations in other parts of the world. India is a cost-effective location and so, Nissan is looking at the prospect of sourcing spare parts for non-compact cars from the subcontinent.
While it plans to procure parts from all locations in India, Chennai would be a focal point, where special packing and other value-engineering aspects would be taken care of. About 90% of the car produced at the new facility would have indigenous content. Nissan has already signed up with 94 Indian vendors for this project. The suppliers would take up positions at the greenfield plant, that would cover a total built-up area of 3 lakh sq m. This plant would have the capability to produce cars on three platforms — A segment cars, B segment products and light commercial vehicles. The Indian arm of the Japanese automobile major had started receiving enquiries from some of its counterparts in Europe to supply from India. Both on the cost and quality front, the subcontinent had an edge, the official said.

Nissan has initiated the process of evaluating the enquiries. It is also working on it with its team so as to capitalise on the new opportunity. During a recent visit to the city, Nissan executive VP and chief recovery officer Colin Dodge said the company’s market share has been increasing steadily. It would continue to invest heavily in new technology. "We are here to stay. India is an important market for our company." Asked about its joint venture agreement with Ashok Leyland for the manufacture of light commercial vehicles, the official said it is on track. The first roll-out is scheduled during the second half of 2011-12.

Nissan Motor Company communications department GM Fernando Menezes, during an interaction with ET here on Tuesday, said the Japanese auto major has received stupendous response on the hiring front. For 800 jobs, it had received around 40,000 applications, several of whom were ITI graduates. About 300 employees from India had received training at its overseas plant locations. He also said Nissan has identified five countries to set up production base on account of their competitiveness. While India, Thailand and China are the three locations that have been firmed up so far, the other two are in the process of being identified. On the compact car, the official said one million cars would hit the roads by 2012. In India, production is expected to commence in May while in Thailand it would start earlier - March. The advantage of sourcing from low-cost competitive countries is that Nissan is able to manage the exchange rate fluctuations better.

Government clears FDI proposals worth
US$ 229.67 million
Source: IBEF

  The government has cleared 10 foreign direct investment (FDI) proposals which will bring in US$ 229.67 million. The largest FDI of US$ 153.31 million will be brought in by Essel Group-promoted DTH service provider, Dish TV India through issue of foreign currency convertible bonds. The decision is based on the recommendations of the Foreign Investment Promotion Board (FIPB) in its meeting held on July 24, 2009. The government has also approved K.S. Oils' proposal for issuance and allotment of warrants for a sum of US$ 20.03 million.

FDI inflows into India in April-May 2009 up by
13 per cent: DIPP
New Delhi, Source: IBEF

Foreign direct investment (FDI) inflows into India in April-May 2009-10 have surged by 13 per cent at US$ 4.2 billion as against the previous two months driven by recovery in the global financial markets, according to a top government official. “FDI inflows were higher in April and May (first two months of FY10) at USD 4.2 billion. In February-March, inflows were about US$ 3.7 billion,” Secretary to Department of Industrial Policy & Promotion (DIPP), Mr Ajay Shankar, said while addressing the press at a Confederation of Indian Industry (CII) function. Attributing the inflows to global economic recovery, he further added, “There has been a pick-up in fund inflows because of return of liquidity and strengthening in the global financial markets.” Cumulative FDI in India from April 2000 to March 2009 stood at about US$ 90 billion.