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Foreign investment authority by mid-April; SSIs to tie up with European units

The proposed Foreign Investment Implementation Authority will be set up by the end of this month or middle of next month to simplify procedures relating to foreign investment, secretary, industrial policy and promotion, Ajit Kumar said today.

A Cabinet note is in final stages of preparation, Kumar told mediapersons after addressing a two-day Indo-European Union conference, which opened today in New Delhi.

Various procedures, requiring clearances by different ministries, will be combined and given to the authority so as to streamline the process.

The Union Budget for 1999-2000 proposed to establish the authority to tackle the problems of companies which have been facing problems converting their approvals into investments.

The authority will also examine the list of approvals given by the Foreign Investment Promotion Board and the automatic approvals made by the Reserve Bank of India, get feedback from companies, focus on their problems and try to remove obstacles faced by them through discussions.

At present, foreign investors have to get 27 approvals which are time-consuming and obstruct work altogether. The authority would address this problem as well, he said.

As a result, barely 30 per cent of proposals approved actually bring investments into the country. The rest are stuck in procedural bottlenecks. The government is now intent on raising this proportion to at least 60 per cent by the end of December.

The country has approved $ 52 billion of foreign investment since 1991, but received only $ 15 billion investment. While it can absorb $ 10 billion of foreign investment a year, it receives only $ 2 billion at present, mr kumar said.

Earlier, addressing the conference, Kumar said small and medium enterprises, which usually work under resource constraints and cannot afford foreign travels just to explore business potential, will be greatly helped by the conference, which is a regular feature in Europe and has been held once in Singapore.

As many as 306 European and 356 Indian small and medium scale companies are participating in the event, Michael Barrie McGeever, ambassador and head of delegation of the European Commission said.

The event will be different from trade fairs in the sense that it will strive for strategic alliances between Indian and European companies as opposed to mere sales, he said.

About 30 to 40 per cent of host companies are expected to broker strategic alliances, including joint ventures, agreement on transferring technical know-how and sub-contract deals, Fernando Vidal-Folch, executive director of the European Business Information Centre said.

UNI

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