A. Legal Obligations for FDIs by Foreign Companies in India
1. Introduction on Investments by Foreign Companies in India
(i) Foreign companies are permitted to invest in India in accordance to Foreign Direct Investments (FDIs) policies as issued by the Govt. of India (Govt.) through issue of consolidated circulars and master directions by the RBI and also amended time to time.
(ii) Foreign companies are required to obey the guidelines as issued by the RBI under FEMA, 1999 and Industrial Policy as issued by the Govt. for investments in India.
2. Legal obligations for the FDIs in India
- Indian companies are permitted to receive FDIs under the Govt. approval route and automatic route:
(i) FDIs Under Government approval route
(a) FDIs in the 11 sectors are required under the prior Govt. approval route.
(b) Activities of these 11 sectors are not permitted under the automatic route.
(c) List of the 11 sectors:
(ca) Public sector Banks where FDIs are exceeding 20%
(cb) Broadcasting Content Services like FM Radio, up-linking of news and current affairs TV Channels where FDIs are exceeding 49%
(cc) Uploading or Streaming of News and Current affairs through digital media FDIs where FDIS are exceeding 26%
(cd) Investments by Foreign airlines where FDIs are exceeding 49%
(ce) Core Investment Company (CIC) where FDIs are exceeding 0%
(cf) Food Products Retail Trading where FDIs are exceeding 0%
(cg) Mining and Minerals separations of titanium bearing minerals and ores, its value addition and integrated activities where FDIs are exceeding 0%
(ch) Multi-Brand Retail Trading where FDIs are exceeding 51%
(ci) Print Media like publications, printing of scientific, technical magazines, specialty journals, periodicals and facsimile edition of foreign newspapers where FDIs are exceeding 0%
(cj) Print Media like publishing of newspaper, periodicals and Indian editions of foreign magazines dealing with news and current affairs where FDIs are exceeding 26%
(ck) Satellite as establishment and operations where FDIs are exceeding 0%
(ii) FDIs Under Automatic Route
(a) 100% FDIs are permitted under the automatic route without prior approval of the Govt. or the RBI in approximately more than 90% sectors or activities
(b) FDIs are permitted under the automatic route in the agricultural and mining activities including diamond, gold, silver and precious ores but not including titanium bearing minerals and its ores
(iii) FDIs under Prohibited Sectors
- FDIs are not permitted under the prohibited sectors:
(a) Atomic Energy
(b) Lottery business
(c) Gambling and betting
(d) Manufacturing of cigars, cheroots, cigarillos, cigarettes of tobacco or tobacco substitutes
(e) Chit funds
(f) Nidhi company
(g) Real Estate
(h) Trading in Transferable Development Rights (TDRs)
(iv) FDIs under Partial Automatic Route and Partial Government approval Route
FDIs are permitted under Partial Automatic Route and Partial Government approval Route in some specified sectors like public sector banks where 20% FDIs are permitted under automatic route and balance 80% FDIs are permitted under govt. approval route.
3. FDIs Policy for business by Foreign Companies in India
(i) (a) Govt. has opened up Indian economy for investments by the foreign investors (foreign companies) in 1991.
(b) Govt. has created more than 10 million jobs through FDIs in India.
(ii) Govt. has issued consolidated FDIs policy on October 15, 2020 to regularly update and to align with the economic and regulatory situation of the India.
(iii) Govt. has permitted the FDIs in more than 13 sectors of the Indian economy and also further simplify the process and limits of the FDIs in the country and also put more FDIs proposals under automatic route instead of prior Govt. approval route where time and energy of the investors are saved.
(iv) Govt. has also increased the sectoral caps and easing of the restrictions on the FDIs for the sectors where FDIs were permitted under Govt. approval route.
(v) Govt. has also introduced new and simpler online single point interface for the FDIs as commonly known as Foreign Investment Facilitation Portal (FIFP) through replacing the earlier Foreign investment Promotion Board (FIPB)
4. Entry routes for business by Foreign Companies in India
- Setup as corporate entity by the foreign companies in India
(i) Indian Wholly Owned Subsidiaries (WOSs) 100% owned by the foreign companies
(a) Foreign companies are permitted to setup WOS where intellectual property rights of foreign parent company are not to be shared with the outsiders.
(b) Foreign companies are not required to obtain prior govt. approval where 100% FDIs are permitted under the automatic route.
(c) Foreign companies are required to report to the RBI where 100% FDIs are permitted under the automatic route.
(d) Foreign companies are permitted to carry the commercial activities in accordance to the companies’ Memorandum and Articles of associations (MOA) under the Companies Act, 2013 and in accordance to the guidelines as issued by the RBI under the FEMA, 1999.
(ii) Indian Joint Ventures not 100% owned by the foreign companies
(a) Foreign companies are permitted to setup Joint venture where intellectual property rights of foreign parent company are to be shared with the outsiders.
(b) Foreign companies are not required to obtain prior approval where 100% FDIs are permitted under the automatic route.
(c) Foreign companies are required to report to the RBI where 100% FDIs are permitted under the automatic route.
(d) Foreign companies are permitted to carry the commercial activities in accordance to the companies’ MOA under the Companies Act, 2013 and in accordance to the guidelines as issued by the RBI under the FEMA, 1999.
(iii) Indian Limited Liability Partnerships (LLPs) 100% owned by the foreign companies
(a) Foreign companies are permitted to setup LLPs without Indian partners where intellectual property rights of foreign parent company are not to be shared with the outsiders.
(b) Foreign companies are permitted to setup LLPs with Indian partners where intellectual property rights of foreign parent company are to be shared with the outsiders.
(c) Foreign companies are not required to obtain prior govt. approval as foreign companies not permitted to setup LLPs where 100% FDIs are not permitted under the automatic route.
(d) Foreign companies are permitted to carry the commercial activities in accordance to the Partnership agreements under the LLP Act, 2008 and in accordance to the guidelines as issued by the RBI under the FEMA, 1999.
- Setup as non corporate entity by the foreign companies in India
(i) Indian Brach Office (BO) 100% owned by the foreign companies
(a) Foreign companies are permitted to established the BO with the prior approval from the RBI through AD-I Banks in India
(b) Foreign companies are permitted to carry out the following commercial activities through the BO in India:
(ba) Export or Import of goods and procurement of goods for export and sale of goods after import is permitted on wholesale basis
(bb) Rendering of professional or consultancy services
(bc) Carrying out research work in which parent company is already engaged
(bd) Promotion for technical or financial collaborations between Indian companies and parent company or group companies
(be) Representation the parent company or group companies in India
(bf) Rendering of Services for information technology and development of software in India
(bg) Rendering of technical support to the products as supplied by parent company or group companies
(bh) Operating the foreign airline or shipping activities in India.
(ii) Indian Liaison Office (LO) 100% owned by the foreign companies
(a) Foreign companies are permitted to established the LO with the prior approval from the RBI through AD-I Banks in India
(b) Foreign companies are permitted to carry the following activities through the LO in India:
(ba) Representation in India on behalf of parent company or group companies
(bb) Promotion the export or import from India
(bc) Promotion the technical or financial collaborations between parent or group companies and entity in India
(bd) Acting as communication channel between parent entity and entity in India
(iii) Indian Project Office (PO) 100% owned by the foreign companies
(a) Foreign companies are permitted to open the PO without the prior approval from the RBI
(b) Foreign companies are permitted to open the PO for the activities relating to a specific project
(c) Foreign companies are permitted to open the PO subject to the certain terms and conditions in India:
(ca) Where contracts are secured from the Indian companies or govt.
(cb) Where mandatory regulatory clearances are obtained
(cc) Where projects are funded through direct foreign inward remittances from banking channels, financed by financial institutions or banks
B. Registration of Foreign Companies Working for business in India
1. Introduction on Registration – Section 379 under Companies Act, 2013
- India is a fastest developing country in the world. Other countries are desired to invest. India is actually a hub for doing business as the cost of production is low and also having lots of domestic demands.
(i) Definition of Foreign Company – section 2(42)
(a) Company or body corporate like LLP etc. as incorporated outside India and having a place of business in India itself or through an agent in physical or in electronic mode
(b) And also conducting any business activity in India in any other manner
(ii) Roles of the RBI
- The RBI is permitting the foreign inward remittances against FDIs in accordance to guidelines as issued by the RBI under FEMA, 1999
(iii) Registration with the office of ROC
(a) Foreign companies are mandatory required to submit certain documents to the office of ROC for registration within 30 days from the date of establishment of place of business in India like WOS, JV, LLP, BO, LO or PO. Hence domestic company is not required separately register with ROC beside where 100% FDIs are received by the domestic company.
(b) Documents for the Registration with the office of ROC
- The certified copies are to be submitted against the registration with the office ROC for the charter, statute, memorandum and articles (MOA) of the company or any other instrument as constituting or defining the constitution of the foreign companies outside India.
(c) Translation in English language
Certain documents are to be translated in English Language where original documents are not in English language:
(ca) Address of registered office or principal office of Foreign Company
(cb) List of directors and secretary of the Foreign Companies along with particulars as may be prescribed by the MCA in India.
(iv) Name of the Indian Resident as authorized person in India
Foreign companies in India are mandatory required to provide the name and address of resident authorized person as residing for minimum 180 days in India to accept service of the notices or any other document as required by office of ROC for registration of the Foreign Companies in India.
(v) Address of Place of Business in India
Foreign companies in India are mandatory required to provide an address of the Indian office as deemed a principal place of business to the office of ROC for registration of the Foreign Companies in India.
(vi) Particulars of Previous Place of Business
Foreign companies in India are required to provide particulars to the office of ROC against any previous office as was opened and closed.
(vii) Declaration by the Foreign Companies
Foreign companies in India are required to provide the declaration that director’s of the companies or authorized representatives as located in India are not involved or convicted or debarred from Formation of the company and for performing management activity in India or outside India
2. Procedure for Registration of the Foreign Company-Section 380
(i) Registration with office of the ROC
(a) Foreign companies in India are required to file to office of the ROC a Form No. FC-1 along with certain documents within 30 days from the date of establishment of place of business in India as WOS, JV, LLP, BO, LO or PO.
(b) And also to submit a copy of approval from the RBI or from any other regulator where any approval is required to establish a place of business in India or a declaration from the authorized representative of Foreign Companies that no approval is required.
(ii) Filing of alteration with office of the ROC
Foreign companies are required to file a Form No. FC-2 along with certain documents with- in 30 days from date of alteration with office of the ROC
3. Financial Statements of Indian Business Operations -Section 381
(i) Preparation of the Standalone Financial Statements
(a) Foreign companies in India are required to prepare the financial statements of the Indian business operations in accordance with Schedule III of the Companies Act, 2013
(b) And also to prepare the documents as required in accordance with the Chapter IX of the Companies Act, 2013
(ii) Preparation of the Consolidated Financial Statements
Foreign companies in India are required to submit with office of the ROC a copy of the latest Consolidated Financial Statements of the parent Foreign Companies.
(iii) Statement of Related Parties Transactions– Section 2(76)
(a) Foreign companies in India are required to submit a statement of the related parties’ transactions.
(b) Related parties to Includes :-
(ba) Foreign Company
(bb) Subsidiary company of the Foreign Company
(bc) Holding company of the Foreign Company
(bd) Firm where the Foreign Company is a partner
(be) Firm where subsidiary of the Foreign Company is a partner
(bf) Firm where holding company of the Foreign Company is a partner
(c) Other Information’s relating to related parties to includes :-
(ca) Nature of the Relationships
(cb) Description and nature of the transactions
(cc) Amount of the transactions with opening, closing, highest and lowest balances
(cd) Reasons for the transactions
(ce) Material impact of the transactions on the both parties
(cf) Amount of written off or written back against dues with related parties
(cg) Declaration that the transactions were carried at Arm’s Length Price (ALP)
(ch) Any other detail to understand the impact of related parties transactions.
(d) Statement of the Repatriation out of the Profits to Includes :-
(da) Amount of the profits as repatriated during the financial year
(db) Recipient of the repatriations
(dc) Mode of the repatriations
(dd) Date of the repatriations
(de) Details of the city where repatriation is not sent to residence country of beneficiary
(df) Approval of the RBI or any other authority if any needed
(iv) Statement of Transfer of the funds
(a) Statement of transfer of funds including dividend is to be prepared between place of business of the foreign company in India and any other related party of the foreign company outside India including holding, subsidiary and associate companies
(b) And also date of transfer and amount of the fund as transferred or received
(v) Filing of the Financial Statements by the Foreign Companies
(a) Foreign companies in India are required to file a standalone financial statement of the Indian entity and consolidated financial statement of the foreign companies along with other required attachments with the office of ROC within 6 months from the date of close of the financial year i.e. up to September 30th every year.
(b) However ROC is permitted to extend the period not exceeding 3 months i.e. up to December 31st against the special reasons through filling of an application in writing by the Foreign Companies to office of the ROC
(vi) Audit of Accounts of Foreign Companies against Indian Business Operations
Foreign companies in India are required to get an audit of the accounts related to Indian business operations from the practicing Chartered Accountants firm as registered with ICAI in India
4. Miscellaneous Provisions
(i) List of Places of Business of the Foreign Companies
Foreign companies in India are required to file a Form No. FC – 3 as list of place of the business in India as on date of the balance sheet along with the financial statements
(ii) Display of Name etc. of the Foreign Companies-Section 382
(a) Foreign companies in India are required to exhibit the name of the company and name of country of incorporation in English and a local language of the Indian state where place of business in India.
(b) Foreign companies in India are required to state the name of company and name of the country of incorporation on the documents:
(ba) Letter Heads
(bb) Bills
(bc) Letter Papers
(bd) Notices
(be) Advertisements
(bf) Any other official Publication of the Company
(iii) Service of Notice or Documents on the Foreign Companies -Section 383
Any process, notice or any other document is to be treated as deemed served where sent by office of the ROC through posted or delivered by electronic mode at the Indian address as communicated to the office of the ROC by Foreign Companies.
(iv) Filling of Annual Return by the Foreign Companies-Section 384
(a) Foreign companies in India are required to prepare and to file the annual returns of the Indian business operations in Form No. FC-4 within 60 days from the date of close of the financial yeare. 30th May every year.
(b) Mandatory details for the filling of annual returns:-
(ba) Details of the promoters, directors and key managerial personnel and also changes therein since close of the previous financial year
(bb) Details of the remuneration to the directors and key managerial personnel.
(bc) Details of the meeting of the members or class of members, board and its various committees along with details of the attendance.
(bd) Details of the members and debenture holders along with changes therein since the close of previous financial year.
(be) Details of the holding, subsidiary and associate companies and firms.
(v) Imprisonment+ Fine for contravention on Foreign Companies-Section 392
(a) Foreign companies in India are punishable with a minimum fine of Rs. 1 lac and maximum fine of Rs. 3 lacs and also additional maximum fine of Rs. 50 thousands per day after continuity of contravention
(b) Every officer of the Foreign Companies is also punishable with imprisonment for maximum 6 months or minimum fine of Rs. 25 thousands and maximum fine of Rs. 5 lacs or imprisonment + fine both.
(vi) Cancellation of validity of contracts etc. for non compliance –Section 393
(a) Any failure of the provisions under section 379 to 384 of the Companies Act, 2013 by the Foreign Companies shall be liable for cancellation of any contract, dealing or transaction with the Indian entities.
(b) And also the Foreign Companies shall not be entitled to bring any suit, claim any set off, make any counter claim or institute any legal proceeding against the contract, dealing or transaction until Foreign Companies have complied the provisions of the section 379 to 384 of the Companies Act, 2013.
C. Corporate tax (Income tax) for business by foreign companies in India
1. Introduction on Income Tax for Business by Foreign Companies
(i) Constitution of India is permitting the Central and State Govts. (both) a right to impose the taxes based on the subjects as distributed between the Central and State Govts.
(ii) Central and State Govts. have right to impose in India:
(a) Direct Tax by the Central Govt.
(aa) Income Tax under the Income Tax Act (ITA) 1961
(ab) Equalization Levy (EL) under the Finance Act, 2020
(ac) Minimum Alternative Tax (MAT) under the ITA, 1961
(b) Indirect Tax by the Central Govt.
(ba) Custom duty under the Customs Act 1962
(bb) Goods and Services Tax (GST) under the GST Act, 2017
(bc) Securities Transaction Tax (STT) under the Securities Contract (Regulation) Act, 1956
2. Income Tax for Business by Foreign Companies
(i) Under the head Direct Taxes
(a) Income Tax (Corporate Tax)
(b) Withholding Tax (TDS)
(c) Transfer Pricing (TP) provisions
(d) Double Taxation Avoidance Agreements (DTAAs) commonly known as Tax Treaties
(e) Equalization Levy (EL)
(a) Corporate Tax for business by Indian + Foreign Companies in India
(aa) Tax Year is commencing from April 1st and ending to March 31st in India.
(ab) Corporate Tax rates for the Indian companies are minimum @ 15% and maximum @ 30% + surcharge + education cess like 15%, 22%, 25% and 30%.
(ac) Unabsorbed losses and depreciation are allowed to be carried forward for set-off against the taxable profits of subsequent years up to maximum 8 years commencing from the end of year in which the loss is incurred.
(ad) Corporate Tax rate for the foreign companies is @ 40% flat
(ae) Foreign companies are also including the Branch offices (BO) and Project office (PO).
(af) Unabsorbed losses and depreciation are allowed to be carried forward for set-off against the taxable profits of subsequent years up to maximum 8 years commencing from the year in which the loss is incurred.
- Corporate Tax under the MAT
(ag) Corporate are to pay corporate tax minimum @ 15% of its book profits where corporate tax as per normal provision of the ITA, 1961 is less than 15%.
(ah) Corporate are to be pay MAT minimum 15% beside tax as per normal provision of ITA is Zero for avoiding tax evasion through excessive deductions of business expenses and excessive deductions of business exemptions.
- Corporate Tax on the Global Incomes
(ai) Corporate as residents of India are to pay tax on the global incomes.
(aj) Corporate as Non-resident of India (commonly known foreign companies) are to pay tax on the incomes as earned in India or sourced from the India.
(ak) Corporate as Non-resident of India are not to pay tax on the incomes as earned outside India or sourced from the outside India.
(al) Corporate as Non-resident of India are to pay tax under the head royalty or fee for technical services @ 10% on the gross amount or rates of tax as provided under the tax treaty where Corporate as Non-resident of India are not having any taxable presence like business connection or permanent establishment (PE) in India.
- Corporate Tax on business through the PE or Fixed place of business
(am) Foreign companies are to pay corporate tax @ 40% flat on the business as being carried out through PE or fixed place in India where foreign companies are carrying 100% (wholly) or not 100% (partly) business through PE or fixed place of business in India.
(an) Business through BO and PO are treated as PE of foreign company in India. Hence foreign companies having BO or PO are to pay corporate tax @ 40% flat.
(ao) LO in India is not treated as PE in India for the foreign companies where activities of LO are restricted to the liaison between head office outside India and Indian parties in accordance to the approval as granted by the RBI through AD banks.
- Corporate tax + Surcharge + education and health cesses
(ap) Corporate are to pay corporate tax + surcharge + education and health cesses.
(aq) Rate for surcharge are varying minimum from 7% and maximum 12% depend on the quantum of the taxable incomes and nature of the corporate on the amount of corporate tax only.
(ar) Rate for cesses are @ 4% on the amount of corporate tax + surcharge
(b) Withholding tax (TDS)
(ba) TDS provisions are applicable on the Indian companies and foreign companies (both) to deduct a fixed percentage of tax by the payer at the source to avoid collection of tax at the time of regular assessment by corporate tax authorities (tax authorities)
(bb) TDS is to be deducted at the time of credit to the account of payee or payment to payee whichever is earlier.
(bc) TDS is to be deposited by the payer with the tax authorities in prescribed form on monthly basis and to file statement (return) on quarterly or annually basis.
(c) Transfer Pricing (TP)
(ca) TP provisions under the ITA, 1961 are applicable for the transactions as conducted between 2 associate enterprises (AE).
(cb) Transactions between 2 AEs should be at Arm Length Principles (ALPs) where the prices as used for the transactions between 2 AEs are to be compared with the transactions between 2 independent entities (IEs) in normal circumstances and with normal terms and conditions
(cc) TP provisions are comparing the price as used for the transactions between 2 AEs are similar with the price as used for the transactions with IEs
(cd) TP adjustments are needed for the overvalued or undervalued transactions made between 2 AEs comparative to the transactions should be between 2 IEs.
(ce) Tax authorities are to adjust the normal income as declared by the taxpayer in India against the transactions made between 2 AEs.
(cf) Govt. of India (Govt.) has also introduced certain measures unilaterally in line with Base Erosion Profit Sharing (BEPS) recommendations in its domestic tax law to counter base erosion of the taxes.
(d) Double Taxation Avoidance Agreements (DTAAs)
(da) DTAAs (commonly known tax treaties) are being entered between the host country where foreign companies are having income based on source and home country where foreign companies are residents.
(db) Tax treaties are being entered to avoid double taxation in host countries and home countries (both).
(dc) Foreign companies (taxpayers) in India are permitted to avail more beneficial tax provisions between tax treaties and Indian tax provisions (both)
(dd) Govt. has entered into more than 90 tax treaties with the countries and specified territories outside India like USA, UK, Mauritius, Singapore and most of European countries etc.
(de) Taxpayers are permitted to avail foreign tax credit (FTC) against the tax payable under the ITA, 1961. Hence taxpayers are permitted to avoid double taxation in India (host country).
(e) Equalization Levy (EL)
(ea) Govt. has introduced the EL in June 2016 in India to levy tax on the foreign companies where foreign companies are not having any physical presence, PE or fixed based in India
(eb) EL is to be levied on the foreign companies having e-commerce activity through digital interface without paying any Income tax to the tax authorities in India
(ec) Payers of the receiver of the services against online advertisement and provision of digital space for online advertisement are to deduct EL @ 6% on the payments to the foreign companies.
(ed) Payers of the receiver of the supply or services from the e-commerce operator (foreign companies) are to deduct EL @ 2% on the payments to the foreign companies.
(ef) Payers of the fee for technical services or royalty are to deduct EL @ 0% on the payments to the foreign companies.
3. Liberalization and Reductions in the rates of taxes under the ITA, 1961
(i) Reduction in rate of Corporate Tax (Income Tax) for new manufacturing companies under section 115BAB of the ITA, 1961
- Reduction in the Corporate Tax Rate is allowed from 30% to 15% (effective rate of tax is 17.16% including surcharge + cesses) for establishing new Manufacturing units by the foreign or Indian companies where companies are incorporated after October 1st, 2019 + manufacturing should commenced up to March 31st, 2024
(ii) Reduction in rate of Income Tax for the non manufacturing companies under section 115BA of the ITA, 1961
- Reduction in the Income Tax Rate is allowed from 30% to 25% (effective rate of tax is 26, 27.82 or 29.12% including surcharge + cesses) without subject to the satisfaction of certain terms and conditions
(iii) Reduction in rate of Income Tax for the non manufacturing companies under section 115BAA of the ITA, 1961
- Reduction in the Income Tax Rate is allowed from 30% to 22% (effective rate of tax is 25.17% including surcharge + cesses) with subject to the satisfaction of certain terms and conditions
(iv) Abolition of the Dividend Distribution Tax (DDT)
- Govt. has abolished the DDT of 15% + surcharge was payable by the companies against declaration of dividend to the shareholders. Hence Incomes under the head dividend was not taxable in the hands of shareholders.
(v) Reduction in the Minimum Alternate Tax (MAT) Rate
- Govt. has reduced the MAT from 18.5% to 15% + surcharge on the book profits of the companies.
D. Goods and Services Tax (GST) for business by foreign companies in India
1. Introduction on GST for business by foreign companies in India
(i) GST is a comprehensive consumption tax on supply of goods and services
(ii) GST is allowing to avail input tax credits (ITC) between the goods and services
(iii) GST is allowing to file the returns based on monthly, quarterly or annually
(iv) GST is mandatory required E-way Bill documentation for physical movement of goods
2. Dual Structuring under the GST
(i) Intra–state transactions
(a) Location of supplier and place of supply (PoS) in same State
(b) Central GST (CGST)
(c) State GST (SGST)
(d) Union Territory GST (UTGST)
(ii) Inter–state transactions
(a) Location of supplier and PoS in different States
(b) Integrated GST (IGST)
3. GST not applicable on the followings:
(i) Basic Customs Duty
(ii) Stamp Duty
(iii) Alcohol for human consumption
(iv) Petroleum products
(v) Taxes on professions, trades, callings and employments
4. GST Rates applicable on the followings:
(i) @ 0% on the Essential Food, Medicines and Services
(ii) @ 5% on the Precious metals and other Common use items
(iii) @ 12% on the Food, Industrial and Consumer Products
(iv) @ 18% on the other Items as standard rate
(v) @ 28% + Additional Cess on the Demerit goods and luxury goods
5. Important Miscellaneous Features
(i) GST registrations + compliances are mandatory for the taxpayers where their aggregate annual turnover is exceeding 20 Lacs against supply of the services and 40 Lacs against exclusive supply of the goods. Hence taxpayers are required to obtain mandatory registration under GST Act, 2017 where their hybrid (mix) annual turnover is exceeding 20 Lacs against supply of services + supply of goods (both)
(ii) Generally GST registrations + compliances are not mandatory for the Foreign companies those are supplying the goods and services directly to India from outside India.
(iii) Separate GST registrations are required for each state where businesses are being carried out in more than 1 state.
(iv) Multiple GST registrations are permitted for conducting the various places of business within the same State
(v) Composition dealer scheme for the GST registrations is available for the small taxpayers with reduced compliance burden on the taxpayer.
E. Legal Obligations for Establishing of Foreign BO, LO or PO in India
1. Introduction on the Establishing of Branch office (BO) Liaison Office (LO) or Project Office (PO) in India
(i) Eligible Foreign entities are permitted to establish BO or LO (Commonly known as Representative office) and PO in India under general or specific approval route
(ii) List of Eligible 5 Foreign Entities Includes:
(a) Foreign Companies
(b) Foreign Non Organizations (NGOs)
(c) Foreign Non Profit Organizations (NPOs)
(d) Foreign Bodies
(e) Foreign Departments
2. Permission for the Establishment of the BO or LO in India
(i) General Approval by the RBI (Commonly known as the RBI Route)
- Foreign eligible entities are required to file an application with the RBI through designated AD Category-I bank for establishing BO or LO in India in Form FNC under general approval route if foreign entity is engaged in the sector where 100% FDIs are permitted in India
(ii) Specific Approval by the Govt. of India (Commonly known as Govt. Route)
- Foreign entities are required to file an application with the RBI through designated AD Category-I bank for establishing BO or LO in India in Form FNC under specific approval route where the RBI is required specific approval from the concerned Ministry or deptt. of Govt. of India in the following circumstances.
(a) Establishment of BO or LO by the foreign NGOs, NPOs, Govt. bodies or Govt. deptt
(b) Applicant is registered or incorporated in Pakistan for establishing at any place in India
(c) Applicant is registered or unregistered entity in 7 Countries for establishing a BO or LO in J&K or North East or Andaman and Nicobar Island
(ca) Bangladesh
(cb) Sri Lanka
(cc) Afghanistan
(cd) Iran
(ce) China
(cf) Hong Kong
(cg) Macau
(d) List of 5 Principal business of the applicant:
(da) Defence Sector
(db) Telecom Sector
(dc) Private Security Sector
(dd) Information and Broadcasting Sector
(de) Foreign entity is engaged in the sector where 100% FDIs are not permitted in India
(iii) Establishment of the BO or LO by other Foreign Entities Not Permitted in India
(a) List of Other Foreign entities Include:
(aa) Partnership firm
(ab) Association of Individuals (AOI)
(ac) Proprietary Concern (Individual)
(b) Hence other Foreign entities are not permitted to establish a BO or LO in India
(iv) List of additional Mandatory Conditions for Approval under the RBI Route
(a) The RBI is required to consider 2 criteria’s
(aa) Track record
(ab) Net worth
(b) Track Record for established of BO or LO in India
(ba) For BO
- Foreign entity should have profit making track record during immediate preceding 5 financial years in home country
(bb) For LO
- Foreign entity should have profit making track record during immediate preceding 3 financial years in home country
(c) Net Worth for establishment of BO or LO in India
- Net worth to includes total paid up capital+ Free Reserves – Intangible Assets as per latest audited balance sheet or account statement as certified by Certified Public Account (CPA) or any Registered Account Practitioner
(ca) For BO
- Minimum net worth should be USD 1 Lac in home country
(cb) For LO
- Minimum net worth should be USD 50 thousands in home country.
3. Application for Establishment of the BO or LO in India
(i) Submission of Application for Establishment of BO or LO in India
(a) (aa) Application for establishment of BO or LO should be forwarded by foreign entity to the RBI through designated AD Category-I bank for approval
(ab) Designated AD Category–I bank is required to obtain Unique Identification Number (UIN) from General Manager in charge, Foreign Exchange Department, Central office Cell, the RBI, New Delhi, Regional office, 6 Parliament Street, New Delhi- 110001 along with prescribed documents
(b) List of the Documents
- English version of
(ba) Certificate of incorporation or registration and Memorandum and Article of Association (M&A) and also
(bb) Audited Balance Sheet as attested by Indian Embassy or notary public in country of registration outside India
(c) Letter of the Comfort
- Letter of Comfort (LOC) from parent company is to be submitted where applicant not satisfying the eligibility criteria likes track record and/or net worth.
(d) Due Diligence
- Designated AD category-I bank is required to do due diligence relating to :
(da) Applicant background
(db) Antecedents of the promoter
(dc) Nature and location of activity
(dd) Source of fund
(de) Compliance with KYC norms before forwarding application along with comments or recommendations to the RBI for obtaining UIN number and approval.
(ii) Allotment of the UIN
- The RBI is required to allot a unique Identification Number (UIN) to the BO or LO
(iii) Allotment of the PAN
- BO or LO is required to obtain a PAN from the Income Tax Authorities in India
4. Permitted and Not Permitted (Prohibited) Activities for the LO in India
(i) Permitted Activities for the LO in India
(a) Representing in India on behalf of parent company or the group companies
(b) Promoting the export or import from India
(c) Promoting technical or financial collaborations between parent or group companies and entity in India
(d) Acting as communication channel between parent entity and entity in India
(ii) Not Permitted (Prohibited) Activities for the LO in India
(a) Not permitted to undertake any business activity in India
(b) Not permitted to earn any income in India
(c) Not permitted to incur any expenses other than through direct inward remittances in foreign exchange from head office outside India
5. Foreign Insurance Company, Bank or Law Firm for establishing LO
(i) LO of the Foreign Insurance Company in India
- Foreign Insurance company is permitted to establish a LO after obtaining of approval from Insurance Regulatory and Development Authority (IRDA) as set-up in India in addition to the RBI.
(ii) LO of the Foreign Bank in India
- Foreign bank is permitted to establish a LO after obtaining of approval from department of Banking Operations and Development (DBOD) of the RBI in India
(iii) LO of the Foreign Law Firm in India
- Fresh permission or renewal for LO of Foreign law firm is not permitted. However already approved are permitted to continue till date of its expiry.
6. Extension of Approval of a LO Permitted in India
(i) Designated AD Category – I bank is permitted to extend the validity of LO for maximum period of 3 years from the date of expiry of original or extension where applicant has also complied the following terms and conditions
(a) LO should have submitted the Annual Activity Certificates (AACs) for all previous year
(b) LO should have maintained an account with designated AD Category –I bank is in accordance to terms and conditions as stipulated in approval
(ii) Extension is to be granted by AD Category-I bank within 1 month from date of request under intimation to the RBI along with reference number of original approval letter and UIN
(iii) Extension of Validity of the LO of Insurance entity and Bank in India
- Application for extension of validity of period of LO of insurance entity and bank is to be submitted to IRDA and DBOD respectively
7. Permitted and Non-Permitted (Prohibited) Activities for the BO in India
(i) Manufacturing or Trading Activities Permitted for the Parent Entity or Group Companies Outside India
- Companies incorporated outside India and also engaged in manufacturing or trading activities Outside India are permitted to set up BO in India to represent the parent or group companies and also to undertake following business activities in India. Hence BO is not permitted for manufacturing or trading activity in India.
(a) Export or Import of goods and procurement of goods for export and sale of goods after import is permitted on wholesale basis
(b) Rendering of professional or consultancy services
(c) Carrying out research work in which parent company is already engaged
(d) Promoting for technical or financial collaborations between Indian companies and parent company or group companies
(e) Representing the parent company or group companies in India
(f) Rendering of Services for information technology and development of software in India
(g) Rendering of technical support to the products as supplied by parent company or group companies
(h) Operating the foreign airline or shipping activities in India.
(ii) Retail Trading Activities Not Permitted in India
- Retail trading activities are not permitted by a BO in India
(iii) Manufacturing or Processing Activities Not Permitted for the BO in India
(a) Manufacturing or processing activities are not permitted for BO in India
(b) However permitted through incorporation of a subsidiary company in India
(iv) Remittances against Profits by the BO
(a) BO is permitted to remit Outside India against profits after payment of taxes
(b) Following documents are to be submitted for the remittances
(ba) Certified copy of audited balance sheet and profit and loss account of the BO in India
(bb) Certificate from Chartered Accountant certifying the manner of arriving remittable profit and also entire remittable profit is earned from permitted activities by BO and also profit not include a profit on revaluation of assets of the BO in India
8. Establishment of the Project Office (PO) Permitted in India
(i) Project Office (PO) by the Foreign Entities
(a) The RBI has granted general or specific approval route to the foreign companies to establish a PO in India
(b) However PO should secure a contact from Indian entity to execute a project in India
(c) (ca) Project should be funded by inward remittance from Outside India or
(cb) Project should be funded by bilateral or multilateral International Financing Agency and also
(cc) Project should be cleared by an appropriate authority in India and also
(cd) The Indian Entity as awarding the contract should obtain a term loan from Public Financial Institution or bank for the project in India
(d) In absence of the above mentioned, under the para (a) to (c) foreign entity is required to obtain a specific permission from the RBI through designated AD Category – I bank in India.
(ii) Bank Account for the PO
- Designated AD category I bank can open non–interest bearing foreign currency account for the PO in India after satisfaction of the followings terms and conditions
(a) PO should be established with general or specific approval route from the RBI and also from appropriate project sanctioning Authority
(b) Contract should be specifically provides for the payment in foreign currency only.
(c) PO is permitted to open 2 foreign currency accounts only with the same designated AD category–I bank one in USD and other in non USD
(d) Permissible debits to the account are to be project related expenditures and permissible credits to the account are to be foreign currency receipts from foreign entity only.
(e) Designated AD Category-I bank is required to ensure that permissible debits and credits are allowed in the Foreign currency account and also account should be 100% scrutinized by Concurrent Auditor of bank
(f) Foreign currency account should be closed at time of completion of project
(iii) Remittances by the PO
- Designated AD Category-I bank is permitted to remit by the PO as pending winding up or completion of project after satisfaction of the followings terms and conditions
(a) PO should obtain an auditor certificate relating to payment of all liabilities including income tax
(b) PO should submit an undertaking as remittance will not affect the completion of project in India and also shortfall of fund to complete the project if any will be received through inward remittance from outside India
(iv) Inter Project Transfer of the Fund
- Prior Approval from the RBI is required for inter project transfer of fund in India
(v) Reporting to the RBI by PO in India
(a) Foreign entity is required to furnish the followings details within 2 months from the date of establishment of PO to the RBI through Designated AD Category –I bank in form FNC
(aa) Name and address of the foreign entity
(ab) Reference number and date of letter against the contract awarded in accordance to Regulation No. 5(ii) of Notification No. FEMA 22/2000-RB, dated May 03, 2000
(ac) Particulars of authority as awarding the project or contract to the PO
(ad) Total amount of the contract
(ae) Address, e-mail and telephone number of the PO
(af) Tenure of the PO
(ag) Brief detail of the project undertaken
(ah) Name of designated AD Category – I bank for the opening of foreign currency account in USD and non USD
(ai) Undertaking that the PO is eligible to avail General Permission in accordance to Regulation No. 5(ii) of Notification No. 22 dated May 03, 2000 read with Notification No. 95 dated July 02, 2003.
(b) PO is required to submit a certificate from Chartered Accountant showing the status of the project and also confirming that the accounts of PO are audited and activities as undertaken are in accordance to general or specific permission by the RBI
9. Special Provisions for the BO, LO or PO in India
(i) Purchase of the Immovable Property in India by BO,LO or PO
(a) BO or PO in India is permitted to purchase of immovable property if necessary or incidental to carry on the activities of the BO or PO as case may be
(b) Payments for the purchase of immovable property are to be made out of the foreign inward remittance through normal banking channel only
(c) Declaration is to be submitted to the RBI in Form IPI within 90 days from the date of acquisition of the immovable property
(d) This property can be mortgaged with a bank as security for the borrowings.
(e) Sale proceeds of the property on winding up are to be repatriated with approval from the RBI
(f) However an approval from the RBI is also required for acquisition of immovable property by an entity incorporated in the 10 countries
(fa) Pakistan
(fb) Bangladesh
(fc) Sri Lanka
(fd) Afghanistan
(fe) China
(ff) Iran
(fg) Nepal
(fh) Bhutan
(fi) Hong Kong
(fj) Macau
(ga) LO from any country is not permitted to acquire an immovable property in India
(gb) However LO from any country is permitted to an acquire immovable property on lease not exceeding 5 years
(ii) General Conditions for the BO or LO
(a) Entities from Nepal is permitted to establish a LO but not permitted to establish a BO in India
(b) BO or LO is required to open non-interest bearing INR current account in India
(c) Approval from the RBI is required to transfer of assets to subsidiaries or other BO
(d) Term deposit exceeding 6 months are not permitted against temporary surplus funds of the BO or LO
(e) However term deposits are not permitted to a shipping or airline Company working in India
(f) Regularization of BO or LO is required if established pre FEMA i.e before 1999
(iii) Additional Reporting to Police for New Setting up BO or LO
- Following additional reporting’s are required for setting up of BO or LO
(a) Submit a report containing certain information’s within 5 working days of BO or LO become functional to the Director General of Police (DGP) of the State or Union Territory
(b) Same report is to be submitted on annual basis to DGP along with AAC in India
10. Miscellaneous Provisions for the BO or LO in India
(i) Establishment of a BO in SEZs
(a) The RBI has granted general permission to the foreign companies for establishing of a BO or unit in SEZ area to undertake the manufacturing and service activities
(b) General permission is available after satisfaction of the followings terms and conditions
(ba) Unit should be functioning in sector where 100% FDIs are permitted
(bb) Unit should comply provisions under the Section 380 to 386 of the Companies Act, 2013
(bc) Unit should function on standalone basis only.
(ii) Winding up of a BO in India
- BO is required to approach AD Category -I bank along with documents mentioning under closure of the BO for remittance of winding up proceeds Outside India
(iii) Application for Additional establishment of BO or LO in India
(a) Application for additional BO or LO is to be submitted to the RBI through designated AD Category –I Bank where specific approval is required for establishing of a BO or LO
(b) Fresh FNC form is to be submitted for an additional BO or LO
(c) However documents are not to be re-submitted where there is no change in already submitted documents
(d) Justification for the additional BO or LO is to be submitted where BOs or LOs are exceeding by 4 in number in India
(e) Applicant is to be required to identify one office as nodal office to coordinate the activities of all offices in India
(iv) Submission of Annual Activity Certificate (AAC) for Bo or LO in India
(a) BO or LO is required to submit an AAC as on March 31 up to September 30 of each year to the followings
(b) (ba) Designated AD Category-I bank in India
(bb) DGIT (International Taxation) New Delhi
(bc) DGP of the State or Union Territory
(c) (ca) AAC is also to be submitted by the BO or LO or
(cb) By the Nodal office where multiple BO or LO are existed in India
(d) Designated AD Category –I bank is required to scrutinize the AAC to ensure that activities undertaken by BO or LO are in accordance to terms and conditions of the RBI
(e) Designated AD Category –I bank is required to report to the RBI where statutory auditors have given the negative comments or reports
(v) Closure of the BO or LO
- BO or LO is required to submit the followings documents at time of closure of the BO or LO
(a) Copy of approval for establishing of the BO or LO in India
(b) Certificate from the statutory auditors for computation of remittable amount
(c) NOC from the Income Tax authority for remittance
(d) Undertaking from the applicant that no legal proceeding is pending in any court in India
(e) Report from the ROC relating to compliance of provisions of the Companies Act, 2013
(f) Any other document as specified at time of granting an approval
(vi) Role of Designated AD Category – I Bank at time of Closure of the BO or LO
(a) Designated AD Category- I bank is required to ensure that the BO or LO has submitted all the AACs
(b) Also to report to the RBI along with a declaration stating that all necessary documents as submitted by the BO or LO are scrutinized and found in order.
(vii) Approval by the RBI for establishment of a LO
(a) Generally the RBI is taking approximately 40 days in granting a permission for establishment of a LO in India
(b) Generally the RBI is granting a permission for maximum period of 3 years
(c) Generally the RBI is permitting an extension for maximum period of 3 years each time
(d) LO is required to close the establishment in India once original or extended approval is expired. However LO is permitted to convert the establishment into a Joint venture or wholly owned subsidiary (WOS) company in India
(viii) Registration and Annual filings for the BO or LO with the ROC
(a) BO or LO is required to register with the ROC within 30 days from the day of it establishment through filing of e-form FC-1
(b) BO or LO is required to file e-form FC-3 and FC-4 for reporting the financial statement and annual return
11. Conclusion on Establishment of BO, LO or PO in India
(i) Establishment of BO or LO is permitted under the head
(a) General permission (RBI approval route) and specific permission (Govt. approval route)
(ii) Hence certain restrictions are existed where specific permission is required like
(a) Parent entity is located in 8 countries i.e. Pakistan and China etc.
(b) 4 Sensitive sectors i.e. defense etc.
(c) NGOs and NPOs
(d) Sector where 100% FDIs are not permitted in India
(iii) BOs or LOs are not permitted for carrying many activities in India. Hence establishment of Indian (subsidiary) company in India is a solution for the not permitted activities in India.
(iv) Establishment of a PO is permitted in India after satisfaction certain terms and conditions
(v) BOs or POs are permitted to purchase the immovable properties for necessary purposes only. Hence LOs are not permitted to purchase the immovable properties in India. However LO is permitted to take on lease for a maximum period of 5 years
(vi) BOs, LOs or POs are permitted to close their establishment after satisfaction of the certain terms and conditions
(vii) BOs or LOs are required to submit AAC annually to the following offices. Hence PO is not required to submit AAC
(a) Designated AD Category- I Bank
(b) DGIT
(c) DGP
F. Miscellaneous Legal Obligations for Business by Foreign Companies in India
1. Legal compliances under the head Accounting + Book-keeping + Payroll
(i) Foreign companies are required to maintain the books of accounts in accordance to Indian accounting standards or norms along with the supporting documentations in accordance to the ICAI and the ITA, 1961 in India.
(ii) Foreign companies are also required to implement the monthly payroll processing systems (MPPS) for its employees and also to obey the labor laws and regulations for the employees in accordance to the applicable Acts in India.
2. Legal compliances under the head Income Tax
(i) Annually filling of the Income-tax return (ITR) for the companies
(a) Foreign companies are required to file their annual ITR within stipulated time under section 139(1) of the ITA, 1961.
(b) Due dates for filling of ITR by the Foreign + Indian companies:
(ba) ITR to be filed by the Foreign + Indian companies up to October 30th each year where TP provisions are not applicable.
(bb) ITR to be filed by the Foreign + Indian companies up to November 30th each year where TP provisions are applicable.
(ii) Filling of Form No. 49C by the foreign companies for the LO’s
- Foreign companies are required to file Form No. 49C for having physical presence in India through liaison office in India up to May 30th every year.
(iii) Withholding tax (WHT) (commonly known as TDS) compliances:
(a) Foreign + Indian companies are required to deduct the TDS on specific category of the payments in accordance the ITA, 1961
(b)Foreign + Indian companies are required to deposit the TDS with the tax authorities within specified time in accordance the ITA, 1961.
(c) Foreign + Indian companies are required to file quarterly TDS statements (Returns) and also to generate and to issue quarterly TDS certificates to the payees.
(iv) Filling of Personal ITRs by the foreign + Indian employees:
(a) Foreign companies are required to issue annual TDS certificate in Form No. 16 declaring the payments under the head salaries as 100% (fully) taxable and not 100% (partly) taxable along with amount of TDS as deducted and also deposited in accordance the ITA, 1961.
(b) Foreign + Indian employees are required to file their annual ITR up to July 31st each year with the tax authorities based on the Form No. 16 as issued by the Foreign + Indian companies in accordance the ITR, 1961.
(v) Annual Tax Compliances under TP provisions:
(a) Foreign + Indian companies are required to obtain an annual report in Form No. 3CEB from the practicing chartered accountant in India in accordance the ITA, 1961
(b) TP provisions are applicable on the Foreign + Indian companies where international transactions with the AEs are existing during the year under consideration.
(c) Foreign companies are required to file their ITRs up to Nov 30th each year.
(vi) Applicability of provisions under the GST Act, 2017
(a) Foreign Companies are required to deposit the GST returns on monthly or quarterly basis against supply of the goods and services through manufacturing and trading as carried out in India
(b) Foreign + Indian Companies are also required to file the monthly or quarterly returns within specified times in accordance the GST Act, 2017.
3. Legal compliances under the head Statutory Audit + Tax Audit
(i) (a) Foreign + Indian companies are required to obtain the Statutory Auditors reports from the Practicing Chartered Accountant and also to prepare the annual financial statements in accordance the accounting standards as issued by the Institute of Chartered Accountant of India (ICAI)
(b) Statutory auditors are required to audit about fulfillment of the legal compliances in accordance to any law on the land of India like the FEMA 1999, Companies Act 2013, Accounting standards as issued by the ICAI, PMLA 2002 and Benami Property Act 2016 etc.
(ii) Foreign + Indian companies are required to obtain Tax Audit Report (TAR) from the Practicing Chartered Accountant in India where annual gross receipts or turnover is exceeding 1 crore against the business as conducted by the foreign companies.
4. Legal compliances under the head Companies Act, 2013
(i) (a) Foreign companies are required to file annually Form No. FC-3 up to September 30th each year with the office of Registrar of Companies (ROC) for the office, LO or PO along with its annual financial statements, consolidated financial statements of the parent company, list of place of business in India.
(b) Foreign companies are also required to file annually Form No. FC-4 up to May 30th each year with the office of ROC as Annual return
(ii) Foreign companies through Indian wholly owned subsidiary (100% Indian subsidiary) or Indian joint venture are required to file annually form AOC-4 and MGT-7 up to October 30th and November 29th each year respectively
(iii) Foreign companies through Indian LLP are required to file annually Form 8 and Form 11 up to May 30th and up to October 30th each year respectively for the meetings between the Partners and other requirements in accordance the LLP Agreement and LLP Act 2008
5. Legal compliances under the head Shops and Establishments Act
(i) Foreign + Indian companies are required to obtain a registration under the Shops and Establishments Act.
(ii) Shops and Establishment Act is dealing mainly with the employees related rules and regulations.
6. Legal compliances under the head FEMA, 1999
(i) Annual activity certificate (AAC) for LO, BO or PO
(a) Foreign companies are required to obtain annually AAC from the Practicing Chartered Accountants in India against the activities as carried out by the LO, BO or PO in accordance FEMA, 1999 through the RBI
(b) Foreign companies are required to file annually AAC up to September 30th each year with the RBI through AD banks and with the Director-General of Income-tax (DGIT).
(ii) Filling of Foreign Liability and Assets (FLA) Return with the RBI
(a) Foreign companies through Indian Wholly Owned Subsidiary or Indian Joint Venture are required to file annually the FLA return with the RBI up to July 15th each year with unaudited financial statements and up to September 30th each year with the audited financial statements where difference between unaudited and audited financial statements are substantial
(b) Foreign companies through Indian Wholly Owned Subsidiary or Indian Joint Venture are required to report to the RBI for transfer of shares to or from and also for fresh allotment of shares to the non residents of India
7. Legal compliances under the head Industrials and Labor Laws
Foreign + Indian companies are required to obey the additional compliances for social security of the employees of the industries and manufacturing concerns like provident fund, employees state insurance (ESI) factories, building, construction land, pollution, water, fire, waste management and trade license etc.
G. PLI Scheme for Business by Foreign + Indian Companies in India
1. Introduction of Production linked Incentive (PLI) Scheme in India
(i) Govt. has announced the PLI scheme through the Finance Act, 2021 with initial outlay of USD 26 billion under the make in India program to generate additional employment opportunities for the residents of the India.
(ii) PLI Scheme is permitted for the 13 key sectors with an expected turnover of USD 500 billion in next 5 years.
(iii) List of PLI schemes for initial outlay of USD 26 billion is as under:
|
S.No |
Sectors | Ministry or Department | 5 years’ outlay (USD 26 billion) |
| (a) | Advance Chemistry and Cell (ACC) Battery | NITI Aayog, Department of Heavy Industries | 9.27% |
| (b) | Electronic or Technology Products | Ministry of Electronics and Information Technology (MEIT) | 24.24% |
| (c) | Automobiles and components | Department of Heavy Industries | 29.22% |
| (d) | Pharmaceuticals Drugs and Medical devices | Department of Pharmaceuticals | 11.24% |
| (e) | Telecom and Networking products | Department of Telecom | 6.25% |
| (f) | Textile products | Ministry of Textiles | 5.47% |
| (g) | Food products | Ministry of Food Processing Industries | 5.58% |
| (h) | High efficiency Solar PV modules | Ministry of New and Renewable Energy (MNRE) | 2.30% |
| (i) | White goods (ACs and LED) | Department for Promotion of Industry and Internal Trade (DPIIT) | 3.19% |
| (j) | Specialty steel | Ministry of Steel | 3.24% |
| Total | 100% | ||
2. Major Sectors for the PLI Schemes in India
(i) AUTOMOTIVE sector for enhancing the manufacturing capabilities
- PLI Scheme for Auto Components and Automobiles for enhancing India’s manufacturing capabilities and exports
(ii) AVIATION sector for catalyzing growth in the Drone sector
- PLI Scheme for Drones and Drones components through the Liberalized Drone Rules, 2021
(iii) TELECOM sector for attracting the global investments (FDIs)
- PLI Scheme for Telecom and Networking Products to attract large global investments and to help domestic companies become top exporters
(iv) FOOD PROCESSING sector for boosting the exports and adding more goods
- PLI Scheme for Food processing sector for promoting Indian brands of food products
- Boost exports and ensure remunerative prices for the farm produce
(v) CHEMICALS sector for enhancing the domestic procurements
- PLI Scheme in advance chemistry cell battery for enhancing India’s manufacturing capabilities and promoting exports
(vi) TEXTILES sector for promoting the production of specific fabrics and textiles
- PLI Scheme for Textiles aimed at boosting the domestic production of manmade fiber (MMF) fabric, MMF apparels and technical textiles.
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(Author can be reached at email address [email protected] or on Mobile No. 9811081957)
Disclaimer : The contents of this article are solely for informational purpose. Neither this article nor the informations as contained herein constitutes a contract or will form the basis of a contract. The material contained in this article does not constitute or substitute professional advice that may be required before acting on any matter. While every care has been taken in the preparation of this article to ensure its accuracy at the time of publication. Satish Agarwal assumes no responsibility for any error which despite all precautions may be found herein. We shall not be liable for direct, indirect or consequential damages if any arising out of or in any way connected with the use of this article or the informations as contained herein.
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