Import of educational material - FDI

[Sanjeev Sharma]

Can a Company wilth 100% FDI, engage itself into importing educational material ( in a pack containing the books & CDs)and selling to schools in numbers equivalent to the no. of students in the class ( one Pack per student)for a price per pack ?? Please clarify.

[Rama Krishana]

I think permission for 100% FDI is one thing and import of study material is another thing. Since the 100% FDI is allowed in education system, there should not be any restriction on import of books and CDs as such. However, for import of books and CDs and see if there is any restriction or condition on such import, one has to see the provisions of foreign trade policy (FTP)

[Sanjeev Sharma]

Thanks. Would it be treated as trading ??

[Rama Krishana]

Again, it is an issue which is to be decided on the basis of nature of transaction. If it is an independent transaction of sale, certainly it will be a trading activity. I have no doubt on the this. But the moot point is that how to determine the nature of activity? Each facts and circumstances must be considered carefully.

[sanjay gupta]

Assuming that you have 100% FDI under automatic route in the activities that are governed by your main objects. FDI is not permitted in education as it is not business in India and Ministry of HRD regulates it. However your activity is trading. If you are permitted for trading/importer of these items in your main objects, then there appears no problem.

AI Summary

Import of educational material may constitute trading; classification determines FDI permissibility and foreign trade policy compliance. Importing and selling packaged educational materials is distinct from permission for 100% FDI: if the sale is an independent commercial sale it will be a trading activity, imports must comply with the Foreign Trade Policy, and where the company's main objects permit trading/import and 100% FDI is permissible under the automatic route for those activities, the import and sale are not precluded; direct provision of education remains regulated and not treated as commercial for FDI.