The government has deferred a decision on the Mahindra Group’s proposal to bring in foreign direct investment (FDI) for a defence production joint venture and on another application by pharma major, Pfizer, to bring in foreign equity in a company.
However, a proposal from a Vedanta group company, Sesa Goa, was approved by the Foreign Investment Promotion Board (FIPB), the nodal agency for clearing applications for FDI into the country. The Sesa Goa proposal does not entail any fund flow and involves transfer of equity by way of share swap in the business of exploring, mining, winning, importing, and certain mineral exports, the finance ministry said.
The FIPB, headed by Economic Affairs Secretary R Gopalan, approved eight FDI proposals worth Rs 100 crore in its last meeting earlier this month, but deferred a decision on eight. At the meeting, the board also referred Shriram Financial Ventures’ Rs 2,000-crore FDI proposal to the Cabinet Committee on Economic Affairs.
The Chennai-based company had sought FIPB’s approval for induction of foreign equity in an investment company.
The Proposal of Zooropa Foods Private Limited, Haryana, which was cleared by the board, will bring in FDI worth Rs 100 crore.
The Mahindra & Mahindra proposal was to set up a JV to develop, manufacture and provide service support for radar systems and various kinds of defence electronic systems. The ministry did not provide reasons for deferment of a decision on the proposal.
Pfizer has sought the board’s nod for induction of foreign equity in an operating-cum-investing company to carry out business in pharmaceutical sector.
Decisions on two other proposals related to the pharma sector, including that of Singapore-based B Braun Singapore Pte, were deferred in the FIPB meet.
B Braun Singapore was seeking permission for acquisition of shares of a company engaged in the business of life-saving intravenous fluids and ophthalmic products.
The FIPB also rejected eight FDI proposals including that of A2Z Waste Management and Shriprop Housing Pvt Ltd and Shriram Properties.
India allows FDI in most of sectors through the automatic route, but applications related to certain sensitive sectors like pharmaceutical, defence and telecom, are cleared by the FIPB.