FIPB clears Honda Motor's proposal to set up vocational training centre

The Foreign Investment Promotion Board (FIPB) has recommended for approval a proposal of Japanese auto maker Honda Motor Corporation (HMC) to set up a vocational training institute in India on automobile.

The company had sought approval to set up a vocational training institute in Rajasthan to offer technical and specialised courses in areas related to automobiles and supply chain. The courses would be offered to the general public, including employees of Honda group companies in the country.

The company has clarified, “The proposal is to engage in additional activity and does not entail any fresh FDI (foreign direct investment) inflow or change in the shareholding pattern”.

The proposal was initially referred to the Department of Economic Affairs (DEA). However, since the project involves signing a memorandum of understanding (MoU) with the government of Rajasthan, provisioning of concessional land and requirement of accreditation from All India Council for Technical Education (AICTE), DEA had forwarded it for comments from various administrative departments and for consideration of FIPB.

The Department of Industrial Policy and Promotion (DIPP) and the Department of Heavy Industries have given a go ahead to the proposal. However, they had suggested that the Ministry of Labour and Employment may be consulted regarding the project. DIPP had observed since the proposed activity of vocational training is on automatic route, but comments may also be taken from the Ministry of Human Resource Development. The ministries are yet to revert.

FIPB, however, has held the proposal can be approved without waiting for further comments. The Board has recommended the proposal for approval to the Finance Ministry, provided it fulfils all conditions as relates to educational institutions outlined in the consolidated FDI policy for the company in the relevant sector.

Honda Motor Corporation manufactures and sells passenger car Jazz and sedans City, Civic and Accord in the country through a joint venture with the Siel Group. It sells two-wheelers through its wholly-owned subsidiary Honda Motorcycle and Scooter India (HMSI). HMSI is the fourth largest two-wheeler manufacturer at present, having sold 1.55 million units last financial year in the country.