The Ministry of Overseas Indian Affairs has been conducting Pravasi Bharatiya Divas (PBD) for promotion of overseas Indians. While, at the State/ UT level, there are special NRI cell or facilitation centres for the welfare of overseas Indians, along with Department of Industries or Udyog Bandhu or Udyog
The important law governing various features of foreign investment in India is the Foreign Exchange Management Act (FEMA),1999, along with Foreign Direct Investment (FDI) policy. As per the Act, NRI is a citizen of India resident outside India. While, PIO is an individual (not being a citizen of Pakistan/ Bangladesh/ Sri Lanka/Afghanistan/ China/ Iran/ Nepal/ Bhutan), who:- (i) at any time, held Indian passport; or (ii) who or either of whose father or grandfather was a citizen of India by virtue of the Constitution of India or the Citizenship Act, 1955. While, there are various Industrial Policies and Industries Facilitation Acts in the States/ UTs concerned, which defines various business opportunities available for the
"India is a long-term investment for us and we are keen on building the supply chain"
Managing Director, Carrefour WC&C India
Problems and Effects
The extraordinary success of the Indian diaspora, spreading across 110 countries and numbering 30 million is well recognised. It has helped to integrate India with the global economies and has made a critical contribution to the Indian economy. They have served like a kind of brand ambassadors for India as well as bridge builders between India and the international community. They have been like a key to unlocking new doors of opportunity for the Indian economy and industry.
As per the available information, Myanmar harbours the highest number of 'people of Indian origin', with not less than 2.5 million ethnic Indians living there. Today, Indian diaspora no longer signifies, rather the success of Indians working abroad has benefited our country as well. A large number of them have excelled in their respective professions, in diverse fields ranging from academia to the corporate world. For example, in Silicon Valley, ethnic Indian technopreneurs form a significant constituency. Their success in the US has been a catalyst for India’s own success in the software industry. Nineteen of the top 20 Indian software businesses are founded or managed by the Indian
According to the World Bank, Indian diaspora sends US$27 billion in remittances back to India each year, the largest sum for any country. They also contribute knowledge of the world, international networks, new ideas, technologies and markets to their homeland. With the support of its diaspora, India has become a world leader in business process outsourcing, information technology and pharmaceuticals.
Non-Resident Indians hold equity stakes in a fairly large number of Indian companies. About 87 companies in the Bombay Stock Exchange (BSE) 100 index featured NRI holdings as of March 2008. They generally have tended to be more stable investors as compared to foreign institutional investors
The ethnic Indian communities have made their contributions by participating actively in the political life of their adopted countries. Indians have emerged as Presidents, Prime Ministers and national leaders, especially in Africa, the Caribbean, the USA, the Asia Pacific and South East Asia. Indians have achieved this glory through sheer dint of their native intelligence, hard work and an innate capacity to merge with host societies and communities.
India's integration into the regional network benefits immensely from its diaspora. Trade between India and the diverse regions has been expanding rapidly. Indian companies are venturing abroad in large numbers, developing the markets and setting up operations in many countries. Besides, individual NRIs have done considerable charitable work in India. The Indian diaspora has responded with contributions in times of need such as wars and natural disasters. Estimates on the inflow of diasporic philanthropy are difficult to come by because a large part of it is carried out through informal channels. Most charitable donations by overseas Indians are given to organisations where there is a personal link through family or friends.
The Indian diaspora is the second largest in the world and is well placed to help India go global. It is even said that, India would have found it harder to grow as quickly as it did, since reforms and deregulation began in 1991.
National Level Investment
India is one of the largest economies of the world. It is a fast growing free market democracy which has come to the global forefront as a hub for manufacturing and services industry. It is the fourth largest economy in terms of purchasing power parity (PPP) and the tenth most industrialized country in the world. Its diversified natural and human resource base; a vast consumer market; a well connected infrastructural set-up; sound macro-economic foundation; etc places it at a competitive position on the world platform.
Moreover, the process of reforms and the consequent deregulation, liberalisation and globalisation of the economy has unleashed the enormous growth potential of the country. This has made India a preferred destination for domestic and foreign investments. It has become the 2nd most attractive investment destination among the Transnational Corporations (UNCTAD's World Investment Report, 2005) and is among the top three investment 'hot spots' for 2004-07 (UNCTAD Corporate Location, April 2004). As a result, India is attracting increased foreign investment, both through Foreign Institutional Investment (FII) and Foreign Direct Investment (FDI). For instance, the cumulative FDI inflows since August 1991 to September 2006 have amounted to Rs.1,81,566 crore (US$43.29 billion). While, during April-September 2006, total FDI inflows (excluding ‘reinvested earnings’ and ‘other capital components’) stood at Rs.20,155 crore (US$4.38 billion). The sectors attracting high cumulative FDIs have been the electrical equipments followed by services and telecommunications. Similarly, New Delhi, Mumbai, Bangalore and Chennai are the first four spots recognised as destinations for FDI inflows.
In order to encourage flow of investment into the country, the Government of India has set up several investment facilitation agencies, which include:-
Foreign Investment Promotion Board (FIPB):- set up in the Ministry of Finance, specifically for expediting the approval process for foreign investment proposals. It is the Secretariat for executing the policy of the Government on FDI. All proposals received in the FIPB Secretariat are considered by the Board.
Foreign Investment Implementation Authority (FIIA):- set up in the Ministry of Commerce and Industry to facilitate quick translation of FDI approval and implementation; to provide a proactive one-stop after-care service to foreign investors by helping them obtain the necessary approvals; sort out operational problems and meet various Government agencies to find solutions to problems. Thus, it assumes the role of understanding and addressing the concerns of investors as well as of the approving authorities; and initiating multi-agency consultation; etc.
Investment Commission (IC):- set up in the Ministry of Finance, to advise the Government on changes in the policy and procedures that will enhance investment in India; recommend projects and investment proposals that should be fast tracked/mentored and thus promote India as an investment destination.
Secretariat for Industrial Assistance (SIA):-
functioning with the Department of Industrial Policy and Promotion, acts as a gateway to industrial investment in India. It provides a single-window clearance for entrepreneurial assistance and facilitates the processing of investors' applications requiring Government approval.
India Brand Equity Foundation (IBEF):-
collects, collates and disseminates comprehensive information on India. It has been developed as a single-window resource for in-depth information and insight on India. It also produces a wide range of well researched publications focused on India's economic and business advantages.
Through such an institutional set-up, the Government has been undertaking several policy measures and incentives in the various segments of the economy, including the infrastructure sector. This has created an investor friendly climate and unfolded numerous opportunities for investment into the country.