April 18 2000
In July 1991 the government announced The New Industrial Policy for India. This new policy has introduced wide-ranging measures aimed at opening up the economy for investment in new infrastructure projects. Such measures include the following, among others:
Overseas banks are allowed to finance projects in India with the prior approval of the Ministry of Finance (MOF). The MOF sends a letter which specifies the terms and conditions under which its approval is granted.
Foreign lenders to projects in India must open special companies through which investments are channeled. The relevant state government and/or Indian banks generally guarantee these projects.
The prior approval of the Reserve Bank of India is required before Indian corporate entities can provide guarantees to foreign lenders.
The government has significantly liberalized the rules on foreign investment in projects in India. The following are some of the incentives the government has implemented in order to encourage investment in projects.
The following are some of the initiatives for improving urban infrastructure:
The following are some of the initiatives to encourage investment in power:
Investment in telecommunications is being encouraged with the following initiatives:
The government has decided that industrial parks should be treated as infrastructure projects. Also, the same incentives that apply to the power and telecommunications industries, as well as urban development projects, should apply to industrial parks.
Although the commercial operation of ports is to remain under the control of existing port authorities, a separate regulatory authority is to be set up to consider issues relating to pricing and other issues of importance to private investors. Ports with private participation will continue to be exempt from corporate taxes.
For further information on this topic please contact Shardul Thacker at Mulla & Mulla & Craigie Blunt & Caroe by telephone (+91 22 204 4960) or by fax (+91 22 204 0246) or by e-mail (email@example.com).
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