The Foreign Investment Promotion Board has overruled objections raised by the department of chemicals and petrochemicals to allow a proposal by Sabic Marketing Europe Ltd to set up its Indian subsidiary.
The proposed subisidary is likely to undertake trading activities and domestic sales of petrochemicals and plastics products.
In its original application, the multinational had proposed to set up Sabic India Ltd in which it will hold 51 per cent as foreign direct equity.
The company would be involved in project technology, consultancy, and research and development in various fields and will facilitate transfer of technology to domestic companies.
However, in a subsequent amendment, Sabic Europe also included a clause seeking permission to undertake domestic trade in plastic and petrochemical products.
The department of chemicals had raised objections to allowing a foreign company subsidiary to enter the domestic petrochemicals business.
But the Foreign Investment and Promotion Board (FIPB) has held that since the proposal was for only 51 per cent foreign equity and that there was no policy to restrict foreign companies from trading in petrochemicals through Indian joint ventures, the departments objections were not sustainable and valid, sources said.
The proposal has also been okayed by the commerce ministry subject to the condition that import should be as per the exim policy and for items that fall under the OGL.
