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Appendix 8 Intra SAARC FDI Collaborations India is one of the SAARC countries where overseas investment policy has been substantially liberalized in recent years. Indian companies can invest up to US$ 100 million (US$ 150 million SAARC countries, excluding Pakistan and Myanmar and up to Rs 7000 million by way of rupee investments in Nepal and Bhutan) in a year without approval of RBI or GoI provided the overseas investment is not real estateoriented. Funding of such investments can be out of balances held in exchange earners foreign currency account (EEFC) of the Indian company or 100% of ADR/GDR proceeds or withdrawal of foreign exchange from an authorised dealers in India up to 200% of the not worth of the Indian company. India’s investment in South Asian countries was US$ 164.53 million during the period 1996–2002, being no more than a little over 2% of its overseas world investment. Nepal was the most important destination of Indian investment followed by Sri Lanka. Since 2002 however Sri Lanka has overtaken Nepal as India’s largest investment destination in South Asia. 1 By virtue of its proximity and the Trade Treaty with India, close economic linkages between India and Nepal have manifested themselves, inter alia, through Indian investment and joint ventures in Nepal. Government of India has established a special ‘Nepal Window’ to facilitate approvals for Indian investment in Nepal and the limit for ‘fast track’ approval by Reserve Bank of India for investments in Nepal has been raised in July 2000 to Rs 350 crores (Indian currency). In 2000 there were over 265 approved Indian joint ventures in Nepal of which over 100 are operational, with a cumulative total Indian investment amounting to between 36–40% of the total FDI in Nepal. In 2004 there were 114 operational Indian joint ventures in Nepal with authorised capital of NR 14.33 billion. Of these, 22 joint ventures had authorised capital of NR 100 million and above. [See Table A8.1 (a)]. There have not been any specific investments in Pakistan through India. However, of late, some signs of possible investment are visible. Reliance Industries is in advanced negotiations to acquire the petrochemical business of ICI-Pakistan close to US$ 300 million. ICI Pakistan which comprises of 5 Pakistan businesses of polyester, soda ash, chemicals, life sciences and paints is one of the largest quoted companies on Karachi, Lahore and Islamabad stock exchanges. The $2.2 billion Indian software services major Tata Consultancy Services (TCS) has taken the first steps to set up a base in Pakistan. If it succeeds, TCS will become the first Indian IT Company to the market. Dabur India will soon have a foothold on Pakistan soil for it will be setting up a manufacturing joint venture with Pakistani firm by the end of this year, Ayurvedic products will be the fulcrums of their joint ventures in Pakistan. Pakistan Government has given them note to set up the subsidiary marketing venture in Pakistan, which would make their products available to consumers at cheaper rate. [See Table A8.1 (b)]. Table A8.1 (a), (b) and (c) list some of the successful examples of intra SAARC FDI and technical collaborations in the region. 1 Ananya Raihan (2006) ‘Regional Economic Cooperation: Investments and Joint Projects’, http://www.southasianmedia.net/ conference/conference_envisioning/vision_goup_5.htm
APPENDICES 215 Table A8.1 Intra-SAARC FDI (a) Indo-Nepalese Collaboration Indian Comapany Nepalese Company Type of Collaboration Sector MTNL United Telecom Ltd. (UTL) Joint venture company in collaboration with Telecom Telecom Consultants India Limited (TCIL), Videsh Sanchar Nigam Limited (VSNL) and NVPL (Nepal Ventures Pvt. Ltd., a Nepalese Company) LIC Life Insurance Corporation Joint venture in collaboration with Vishal Group Limited Life (Nepal) Insurance (b) Indo-Pakistani Collaboration Indian Comapany Pakistani Company Type of Collaboration Sector Hewitt, India Arwen Tech HR skills assessment and strategy for training of call IT centre personnel Compare, India Creative Chaos Joint venture IT (c) Indo-Sri Lankan Collaboration Indian Comapany Sri Lankan Company Type of Collaboration Sector Tata Infotech John Keells Institute of Infor- Technical collaboration IT mation Technology (Pvt) Ltd Aptech Ltd., India Mackwood Infotec (Pvt) Ltd Technical collaboration IT CEAT India CEAT-Kelani Associated Joint Venture between RPG Goenka Group, India, Tyre manufac- Holdings Ltd and the Associated Motorways Group, Sri Lanka. turer Bengal Waterproof Bensiri Rubber Products wholly owned subsidiary Rubber Ltd, Calcutta, India (Pvt) Ltd Ishar Group, Indore, GTB Colombo Corporation Subsidiary of Ishar Group alloy and India Pvt Ltd special steel Gujarat Ambuja Ceylon Ambuja Cement wholly owned subsidiaries Cement Cement, India and Midigama Cement Indian Hotels Co Ltd Taj Lanka Hotels Ltd subsidiary Hotels Asian Paints Ltd Asian Paints Lanka Ltd subsidiary Piants Nilkamal Plastics, Nilkamal Easwaran Plastics Joint venture between Nilkamal Plastics, Bombay, Property Bombay, India (Pvt) Ltd India and the Easwaren Brothers Group, Sri Lanka development, import and export trading, and manufacturing activities Gujarat Glass Ltd Ceylon Glass Company Ltd Owned by acquisition Glass NIIT Ltd, India Unisoft Institute of Techno- Joint Venture IT logy (Pvt) Ltd
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Preface Our consultations with seni
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