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NRI
INVESTMENT
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Booster shot for pharmaceuticals
India’s pharmaceutical industry has shown tremendous progress in terms of infrastructure development, technology base and range of production. India derives its technological strengths in pharmaceuticals on the following bases. Self reliance displayed by the production of 70 per cent of bulk drugs and almost the entire requirement of formulations within India. Automatic approval for up to 74 per cent foreign equity in the case of bulk drugs, their intermediates and formulations (except those produced by the use of recombinant DNA technology).
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 Infrastructure sector is rolling
FDI up to 100 per cent under automatic route is permitted in projects for construction and maintenance of roads, highways, vehicular bridges, toll roads, vehicular tunnels, ports and harbours. Investment worth an estimated $34 billion is needed for the development of national and state highways. Of this, the requirement of private sector investment is $8.3 billion.
Opportunities exist in a slew of highway projects such as four-laning of over 35,000 km of national highways, and highway related en route activities like restaurants, motels, and rest/parking areas as may be decided by the implementing agency.
Select project opportunities in the national roads sector include Chennai-Nellore ($350 million), Bangalore-Chennai ($305 million), Surat-Manor ($180 million) and Jaipur-Ajmer ($147 million).
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E-commerce is hot
Up to 100 per cent FDI is permitted in e-commerce, subject to the condition that the companies would divest 26 per cent of their equity in favour of the Indian public in five years, if the companies are listed in other parts of the world. According to a study by ICRA Ltd, the volume of e-business in India is likely to increase from the level of Rs 4.7 billion in 1999-00 to a level above Rs 250 billion in the next three to four years. The figure makes a clear case for large scale investments in the Indian e-commerce sector.
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 Civil aviation takes off
For starters there is automatic approval for foreign equity participation in airport infrastructure, and 100 per cent investment by Non Resident Indians is permitted. In domestic air transport services, equity from foreign airlines is not allowed in domestic air-transport services either or indirectly. Foreign financial institutions are allowed holding equity in the domestic air transport sector, provided they do not have foreign airlines as their shareholders. Foreign investors are allowed representation (up to 33 per cent of total) on the board of domestic airline companies. The government is considering private sector participation, construction and operation of new airports on a BOT basis. The minimum fleet size for a scheduled operator has been raised from the existing three aircraft to five.
Management contract with a foreign airline is not permitted. Construction of world class international airports in five cities, permitting up to 100 per cent foreign equity investment has been announced.
Important private sector aided projects include the new airport near Kochi ($85.7 million), and projects for development of new airports in Bangalore and Mumbai with private sector participation are under consideration.
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