Press Information Bureau

Government of India

Ministry of Finance

05-September-2012 18:18 IST

Increase in Number of Foreign Companies

As per the 55th Annual Report on the working and administration of the Companies Act 1956 for the year ended March 2011, the number of foreign companies has increased from 2609 as on 31.3.2008 to 3127 as on 31.3.2011. There has been consistent increase in the number of foreign companies which have a place of business in the country.

The Government has initiated several steps in the recent past to ensure business friendly environment and to encourage foreign investment in India such as:

i. Allowing foreign investment in Infrastructure Debt Funds (IDFs)

ii. Allowing AD banks to allow pledge of shares acquired under the FDI scheme.

iii. Allowing general permission for transfer of shares in the financial sector and where the pricing guidelines are not met but where the SEBI pricing guidelines are met.

iv. The FII limit for investment in government securities and corporate bonds has been increased to US$ 20 billion and 45 billion respectively.

v. Lock-in period and residual maturity for the schemes relating to FII investment in infrastructure debt and non-resident investment in infrastructure Development Funds (IDFs) were rationalized.

vi. Qualified Foreign Investors (QFIs) were permitted to invest in non-infrastructure corporate bonds up to a limit of US$ 1 billion.

This information was given by the Minister of State for Finance, Shri Namo Narain Meena in written reply to a question in Lok Sabha today.

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DSM/RS/Hb

Foreign investment policy expanded to ease market access and broaden avenues for inbound capital investment. Increase in foreign companies in India has been accompanied by regulatory measures to encourage inbound capital: permitting foreign investment in Infrastructure Debt Funds; allowing authorised dealer banks to accept pledges of shares acquired under the FDI framework; granting general permission for certain share transfers in the financial sector when pricing guidelines are satisfied; increasing limits for institutional investment in government and corporate debt; rationalising lock in and maturity rules for infrastructure investment schemes; and permitting Qualified Foreign Investors to invest in corporate bonds within prescribed caps.