The Indian government has recently announced that restrictions for foreign direct investments will be reduced further. This time important sectors like defence, airlines and the pharma industry were opened up. Already in the past the current government lowered the hurdles which together with the initiative “Make in India” lead to an increase of foreign direct investments of 29% to 40 bn USD in financial year 2015-16.
The new initative does not only permit to increase shareholding of foreign companies in more sectors respectively allows foreign companies to own local subsidiaries to 100%. In some cases also the conditions under which investments in certain sectors are allowed have been eased. Apple for example, is now allowed to open fully owned stores in India and only needs to fullfill the sourcing norm, which says that 30% of products sold in these stores must be sourced locally, after 3 years. It is expected that other foreign investors will benefit as well from this development.
Investors in the chemical sector have even less restrictions. Since long 100% foreign direct investments are allowed in the Indian chemical industry. Furthermore this sector falls under the “automatic route” which means the centre does not need to approve an investment proposal and only the Reserve Bank of India needs to be informed about the investment. But even though regulatory limitations are less in the chemical industry, to set up business succesfully in a divers and complex country like India requires a detailed market know-how in order to avoid wrong decisions.
Go East Advisors, your expert for the Indian chemical market, does not only help you to comply with all regulatory requirements while setting up a local legal entity. They also bring in their vaste experience of the Indian chemical industry and consult on the right locations for your office, the perfect marketing and sales network, potential business partners etc. based on your specific requirements and your local customer industries.