The Government is likely to set minimum investment limit for joint venture partners under foreign direct investment policy.
“We have decided to define 'joint venture' under which at least two partners should have a minimum 25 per cent stake each. Till now there was no specific shareholding mentioned in FDI policy to define joint venture,” an official source said.
The official said that lack of any prescribed definition for joint venture was leading to cases where companies were entering into partnership without any minimum prescribed investment limit and then terming it as a joint venture.
The policy, which was originally scheduled to be unveiled on March 30, was put on hold as the then DIPP Secretary, Mr P.K. Chaudhery, was appointed Haryana Chief Secretary and the new incumbent is yet to take charge.
“The new definition will be included in the FDI policy. As and when the new Secretary takes over in DIPP, the policy will be released,” the official added.
The DIPP — which is under the Commerce and Industry Ministry — is the nodal agency on FDI policy.
The Government in 2010 had decided to come out with consolidated FDI policy paper summarising all the regulations including those of FEMA and Reserve Bank of India for the benefit of foreign investors. It revises the policy every six months.
The department had last released the consolidated FDI policy on September 30, 2011, in which the conditions for FDI in respect of construction of old-age homes and educational institutions were eased.
For April-January 2011-12, FDI went up 53 per cent to $ 26.19 billion from $ 17 billion in the corresponding period last year.