COMMENTARY
INTERVIEWS
SPECIALS
CHAT
ARCHIVES

FIPB nods to Toyota, Enron plans; Swatch arm application not considered; 28 proposals okayed

The Foreign Investment Promotion Board today approved 28 proposals amounting to a foreign direct investment of Rs 6 billion, including Japan-based Toyota Motor Corporation's application to hike its holding in a car-making joint venture and Enron's plea to increase activities under its existing venture.

Toyota has been allowed to hike its holding from 74 per cent to 87 per cent in the joint venture -- Toyota Kirloskar Motors Private Limited by infusing Rs 740 million, FIPB sources said in New Delhi.

However, the Kirloskar group -- the Indian partner in the venture -- has the option to buyback the stake by December 2004.

Enron India Limited has been permitted to expand activity from its existing $ 15 million venture to include oil exploration, and creating infrastructure for storage of petroleum products. The new activities do not include infusion of any fresh equity.

Besides, Eaton group of the United States has been allowed to set up a wholly-owned subsidiary in India by bringing in Rs 1.27 billion.

The venture would produce control cables, switches, valves and transmission clutches from a facility to be set up in Bangalore.

Meanwhile, Raunaq Pharmaceuticals has also received the green signal from the board to hike stake in its joint venture from 51 per cent to 74 per cent. An amount of Rs 1.68 billion would be brought in for the purpose by the two foreign partners -- Berlin Chemie AG of Germany and Menarini International SA of France.

Bakri International Energi of Saudi Arabia has been allowed to set up three ventures in India for putting up storage facilities for petroleum products at Pipava, Haldia and Haldia Port.

Bakri would hold 70 per cent stake in the holding company while the Indian partner is Usha Business Development Company. Bakri would be investing Rs 83.3 million, Rs 89.5 million and Rs 178.5 million at the Pipava, Haldia Port and Haldia units respectively.

Cordiant Communications of the UK has been allowed to set up a holding company and make downstream investments in an existing Indian advertising company -- Baids Clarion Limited. Foreign direct investment involved in the venture is to the tune of Rs 72 million.

Among the proposals approved today, manufacturing and services sector accounted for Rs 2.39 billion while Rs 1.69 billion would flow into the chemicals and petrochemicals sector. Textiles accounted for Rs 1.07 billion while surface transport, petroleum and natural gas for Rs 360 million, and electronics and software for Rs 200 million.

The FIPB did not today take up for hearing Swiss watchmaker Swatch group's proposal for setting up a wholly-owned subsidiary as ''the documents were not complete''.

''The proposal was not considered today as we are seeking clarifications regarding the earlier joint venture company which Swatch proposed to set up with the RPG group,'' FIPB sources said.

The Rs 100 million proposal has been hanging fire with the board for some time now. The company had sought the board's nod to set up a 100 per cent subsidiary to source components for assembling and marketing watches in the country. But the efforts received a setback when RPG Industries Limited raised objections over the move.

The proposed subsidiary would set up an assembly unit in India, mainly for assembling components such as leather straps, buckles, display counters and packing material, diamonds, both for the Indian and overseas markets.

The group is also planning to launch a range of low-priced Swatch range of watches suited for the Indian market. The assembly unit would be used for that as well. It is also mulling the possibility of tying up with Indian brands such as Titan and HMT for synergising their retail outlets.

The Swatch group has also targetted India as one of the production bases for its hybrid car. The company has initiated talks with the US-based General Motors in this regard.

UNI

Business news