Constitution

The Government has constituted a Foreign Investment Promotion Council (FIPC) under the chairmanship of Chairman ICICI, to undertake vigorous investment promotion and marketing activities. The Presidents of the three apex business associations such as ASSOCHAM, CII and FICCI will be members of the Council. Ministry of Industry personnel will be Member-Secretary.

Boost to FDI

Setting up of the Council follows the Government’s decision to strengthen the institutional mechanism relating to the consideration and approval of Foreign Direct Investment (FDI) proposals. The Common Minimum Programme (CMP) which states that the nation needs and has the capacity to absorb at least US $ 10 billion a year as FDI will require considerable promotional efforts apart from facilitating foreign investment approvals.

Support to FIPB

The strategy adopted is a two-pronged one with one relating to the approvals and clearance required as per the transparent guidelines and other relating to full time investment promotion and marketing. Accordingly a revamped Foreign Investment Promotion Board (FIPB) with fresh guidelines was put under the direct control of the Industry Minister thereby reducing one level in the decision making. As a secondary and supporting measure a Foreign Investment Promotion Council was conceived.

Functions

The Foreign Investment Promotion Council will undertake the investment promotional activity which entails making extensive contact with potential investors, lobbying and interacting with individual companies etc. The Council with distinguished and well known experts as the members will capitalize, manage and coordinate investment promotion and marketing efforts.

Promotional works

The promotional efforts have been mostly centered on addressing general investment promotion seminars and conferences. Besides that a more target-oriented approach is now required, both to identify the sectors/projects within the country requiring foreign direct investment and targeting the specific regions and countries of the world from which FDI would be brought in through special efforts.

What more to be done

It will be necessary to analyze the requirements of various sectors and industries in India which are in need of modernization, technology upgradation and capital requirement. Sectoral profiles and projects proposals for these industries will need to be prepared for presentation to the selected international companies and foreign investors.

Getting foreign investors

It will also be necessary to undertake one-to-one dialogue with individual foreign investors at the Board-room level in order to motivate them to invest in the specified industries and sectors. It is felt that the Government has to identify specific regions/countries where surplus capital is available for investment overseas. Target-oriented efforts will be necessary to contact individual companies in those countries for persuading them to invest in India.

The revamping of FIPB as well as constitution of FIPC has been done with these objectives in view and in accordance with the commitment in the Common Minimum Progamme.