PRIORITY ALLOTMENT OF INDUSTRIAL LAND BY MIDC UNDER FDI CATEGORY

Foreign investment involves capital flows from one country to another, granting extensive ownership stakes in domestic companies and assets. Foreign investment denotes that foreigners have an active role in management as a part of their investment.  Foreign direct investments can be made in a variety of ways, including the opening of a subsidiary or associate company in a foreign country, acquiring a controlling interest in an existing foreign company (minimum 10% ownership stake in a foreign-based company , it is flexible in some special cases in which firm can be established with less than 10% of the company’s voting shares) or by means of a merger or joint venture with a foreign company.

Foreign direct investment (FDI) is a major source of non-debt financial resource for the economic development of India. India has become the most attractive emerging market for global partners (GP) investment due to government’s initiatives in relaxing FDI norms across sectors along with privileges such as tax exemptions. There are two routes by which India gets FDI:-

  1. Automatic route: FDI is allowed without prior approval by Government or Reserve Bank of India. However, they have to inform the RBI about the amount of investment within a stipulated time period.
  1. Government route: The application needs to be made through Foreign Investment Facilitation Portal, processing is done by the concerned Ministries/Departments followed by decision of the Government under the extent FDI policy.

 

Various other conditions as defined in the consolidated FDI policy  are applicable to various sectors. Appended below the details of Sectors / industries allowed FDI through the Automatic route / Government route, extent of FDI and the concerned Administrative Ministry / department:-

 

SECTORS/INDUSTRY

 

FDI CAP

 

APPROVAL ROUTE

 

ADMINISTRATIVE    MINISTRY/DEPARTMENT

                                                   Agriculture & Animal Husbandry
1.     Floriculture, Horticulture, Apiculture and Cultivation of Vegetables & Mushrooms under controlled conditions.

2.     Development and Production of seeds and planting material.

3.     Animal Husbandry (including breeding of dogs), Pisciculture, Aquaculture.

4.     Services related to agro and allied sectors.

 

 

 

100%
 

 

 

Automatic

 

                            Plantation Sector

1.     Tea sector including tea plantation.

2.     Coffee, Rubber, Cardamom, Palm oil tree, Olive oil tree ,plantations

 

 

100%
 

 

 

Automatic

 

        Mining

1.    Mining and Exploration of metal and non-metal ores including diamond, gold, silver and precious ores but excluding titanium bearing minerals and its ores.

2.    Mining and mineral separation of titanium bearing minerals and ores, its value addition and integrated activities.

100%

 

 

 

100%

Automatic

 

 

 

 

Government

 

Ministry of Mines
                                                         Petroleum & Natural Gas
1.     Exploration activities of oil and natural gas fields, infrastructure related to marketing of petroleum products and natural gas, marketing of natural gas and petroleum products etc.

2.     Petroleum refining by the Public Sector Undertakings (PSU), without any disinvestment or dilution of domestic equity in the existing PSUs.

 

100%

 

 

 

 

 

 

 

 

 

49%

 

 

 

 

Automatic

 

 

 

 

 

Automatic

                                                                           

                                                                                    Defence

 

 

Defence Manufacturing

 

100%
 

Automatic     upto    49%

Above 49% under Government route in cases resulting in access to modern technology in the country.

 

Department  of  Defence Production,

Ministry  of Defence, Ministry of Home Affairs

 

                                                                               

                                                                     Broadcasting

 

 

1 .Teleports:  Direct to Home (DTH)

,Cable Networks (Multi System operators (MSOs) , MobileTV, Head end-in-the Sky Broadcasting Service(HITS)

 

2.Broadcasting Content Services:

Terrestrial Broadcasting FM(FM Radio).Up-linking of ‘News & Current Affairs’ TV Channels & Up-linking of Non-‘News & Current Affairs’ TV Channels/ Down-linking of TV Channels

 

 

100%

 

 

 

 

 

 

49%

 

 

 

 

 

 

 

Automatic

 

 

 

 

 

Government

 

 

 

 

 

 

 

 

 

 

 

 

 

Ministry of Information &

Broadcasting

 

                                                                               

                                                                            Print Media

 

1.     Publishing of newspaper and periodicals dealing with news and current affairs. Publication of Indian editions of foreign magazines dealing with news and current affairs.

2.     Publishing/printing of scientific and technical magazines/specialty journals/ periodicals, subject to compliance with the legal framework as applicable and guidelines issued in this regard from time to time by Ministry of Information and Broadcasting. Publication of facsimile edition of foreign newspapers

 

 

 

26%

 

 

 

 

 

 

100%

 

 

Government

 

 

 

 

 

 

Government

 

 

 

 

Ministry of Information &

Broadcasting

 

                                                          

                                                           Single Brand retail trading

 

 

Local sourcing norms will be relaxed up to three years and a relaxed sourcing regime for another five years for entities undertaking Single Brand Retail Trading of products having ‘state-of-art’ and ‘cutting edge’ technology.

 

 

 

100%   

 

 

 

Automatic up to 49%

Above 49% under Government route

                                                                

                                                   E-commerce activities

 

 

(e-commerce entities would engage only in Business to Business (B2B) e-commerce and not in Business to Consumer (B2C) e-commerce.)

 

100%

 

Automatic

                                                                              

                                                                    Satellite

 

 

Satellites- establishment and operation, subject to the sectoral guidelines of Department of Space/ISRO

 

 

 

100%

 

 

Government

 

 

Ministry of Space

                                                                          

                                                                    Telecom

 

 

Telecom Services

 

 

100%

 

Automatic up to 49%

Above 49% under Government route

 

Department of Telecommunications

 

 

                                                             Railway Infrastructure

 

Construction, operation and maintenance of the following:

1.     Suburban corridor projects through PPP

2.     High speed train projects

3.     Dedicated freight lines

4.     Rolling stock including train sets, and locomotives/coaches manufacturing and maintenance facilities

5.     Railway Electrification

6.     Signaling systems

7.     Freight terminals

8.     Passenger terminals

9.      Infrastructure in industrial park pertaining to railway line/sidings including electrified railway lines and connectivity to main railway line

10.  Mass Rapid Transport Systems.

 

 

 

 

 

100%

 

 

 

 

 

Automatic
                                                                         

                                                                    Banking

 

 

Private Sector

 

 

 

Public Sector

 

 

20%

 

 

 

74%

 

 

Automatic up to 49%

 

Above 49% & up to 74% under Government route.

Government

 

 

 

Department  of Financial Services

 

 

Private Security Agencies

 

 

 

 

 

 

74%

 

 

Automatic up to 49%. Above 49% & up to 74% under Government route.

 

Cash & Carry Wholesale Trading

 

100%

 

Automatic

 

Industrial Parks (new & existing)

 

100%

 

Automatic

 

Multi Brand Retail Trading

 

 

51%

 

Government

 

                                                                Civil Aviation

 

 

1.     Airports: Green Field Projects & Existing Projects.

2.     Air Transport Services:

Scheduled Air Transport Service/ Domestic Scheduled Passenger Airline, Regional Air Transport Service (Foreign Airlines are barred from Investing in Air India)

3.     Civil Aviation: Non-Scheduled Air Transport Service, Helicopter services/seaplane

services requiring DGCA approval, Ground Handling Services subject to

Sectoral regulations and security clearance, Maintenance and Repair organizations; lying training institutes;

 

and technical training institutions.

 

 

100%

 

 

 

100%

 

 

 

 

 

 

 

 

 

 

 

100%

 

 

 

 

 

 

 

Automatic

 

 

 

Automatic up to 49%

Above 49% under Government route

100% Automatic for NRIs

 

 

 

 

Automatic

 

 

 

 

 

 

 

 

 

 

 

 

Ministry of Civil Aviation

 

                                          Construction Development

Townships, Housing, Built-up Infrastructure

 

 

 

100%

 

 

 

Automatic

 

Duty Free Shops

 

100%

 

Automatic

 

Asset Reconstruction Companies

 

 

100%

 

Automatic

 
 

Credit Information Companies (CIC)

 

 

100%

 

Automatic

 

Department of Economic Affairs

 

 

Infrastructure Company in the Securities Market

 

 

49%

 

Automatic

 

Department of Economic Affairs

 

 

Insurance

 

 

Insurance Brokers, Third Party Administrators, Surveyors and Loss Assessors, other Insurance Intermediaries

 

 

49%

 

 

Automatic

 

Pension Sector

 

49%

 

Automatic

 

Power Exchanges

 

49%

 

Automatic

 

White Label ATM Operations

 

100%

 

Automatic

 

Financial services activities regulated by RBI, SEBI, IRDA or any other regulator

 

100%

 

Automatic

 

 

Pharmaceuticals

 

 

1.     Pharmaceuticals

(Green Field).

 

2.     Pharmaceuticals

(Brown Field)

 

100%

 

 

100%

 

Automatic

 

 

Automatic up to 74%. Above 74% under

Government route

 

 

 

 

 

Department  of Pharmaceuticals

 

Food products manufactured or produced in India

 

 

Trading, including through e-commerce, in respect of food products manufactured or produced in India.

 

100%
 

Government

 

 

 

Department of Industrial Policy & Promotion

 

 

                                                                      Others

 

Education

Courier services

Private Security Agencies

100%

100%

49%

Automatic

Automatic

Government

 

Ministry of Home Affairs

Prohibited Sectors 

FDI is not allowed in the following sectors:

  • Lottery Business including Government/private lottery, online lotteries, etc.
  • Gambling and Betting including casinos etc.
  • Chit funds.
  • Nidhi company.
  • Trading in Transferable Development Rights (TDRs).
  • Real Estate Business or Construction of Farm Houses (Real estate business does not include development of townships, construction of residential /commercial premises, roads or bridges).
  • Manufacturing of cigars, cheroots, cigarillos and cigarettes, of tobacco or of tobacco substitutes.
  • Activities/sectors not open to private sector investment e.g. Atomic Energy and Railway operations (other than permitted activities)

Position of India in the World

The World Bank’s Doing Business Report 2018 ranked India 100th out of the 190 countries surveyed. The thickening of India’s position in world’s economy is the outcome of contribution of 29th states.

Maharashtra’s contribution in Indian Economy

In specific, Maharashtra’s contribution cannot be overlooked. Maharashtra is the backbone of Indian economy. If India   grows at 8 percent than astonishingly Maharashtra growth would be at least 10 percent as it is gravitational centre of the country. One of the factors that has made the state’s position so powerful is its strong infrastructure, an ideal destination for setting up of industries.

Maharashtra alone contributes 27% of total exports in India. Being the biggest contributor to India’s GDP 15%, Maharashtra has always remained in the forefront of country’s economic development.  The state attracts the highest FDI in the country;  30 percent of the total FDI inflow. According to the DIPP, cumulative FDI inflows in the state of Maharashtra during April 2000 to March 2016 stood US$ 82.62 Billion. The state government has approved 18,709 industrial proposals during 1991-92 to 2014-15.

Maharashtra Industrial Development Corporation (MIDC)

One of the government organisations supporting Maharashtra’s exemplary performance & be a backbone of Indian economy is the project MIDC (Maharashtra Industrial Development Corporation) , established in 1962 with a prime objective of Prosperity to all through Industrialization. The planned and systematic industrial development in the State of Maharashtra has continuously placed Maharashtra in first position in India for the highest productivity, economics performance, business efficiency, government efficiency, infrastructures and overall competitiveness. From its inception, the corporation is continuously working on the policies with would result in Economic lift of the country be it through domestic Or International market. Many Incentive policies are timely introduced by the corporation. Progressive Government taking measures to facilitate industries in generating revenue is what the state is working at.

Classification of Industrial Areas

Maharashtra Industrial areas are divided into 5 zones A,B,C,D & D+  depending on the availability of Industrial Infrastructure.

GROUP DISTRICT/CITIES
A (Developed areas) Mumbai, Pune, etc.
B (Less developed than A) Alibagh, Dhanu, Nashik, etc.
C (Less Developed than B) Bhivandi, Ratnagiri, Baramati, etc.
D (Less developed than C) Aurangabad, Satara, Nagpur, etc
D+ ( Less developed than D) Pithan, Barshi, Kagal, etc.
No Industries Exist Gadchiroli, Hingoli, etc.
Areas affected by Naxalism Gondia, Kinvat, Chandrapur, etc

Criterion for Allotment of Plot on priority under FDI

MIDC allots plots under FDI Category. The quantum of minimum FDI for qualification as FDI units for priority allotment of land is:

  1. Remittance Certificate from RBI is must before Allotment & at various stages of Investment.
  2. Minimum shareholding of the foreign entity should be 51%.
  3. The minimum paid up equity shall not be less than 25% of the project cost.
  4. The minimum investment for A, B & C area should be Rs. 20 Crs. or USD 4 million whichever is more.
  5. The minimum investment for other areas (D, D+, NID & Naxal affected etc.) should be Rs. 10 Crs. or USD 2 million whichever is more.
  6. For A, B & C areas the land rate per 1000 Sq.mtrs is Rs. 1 Cr. & other areas the land rate per 2000 Sq.mtrs is Rs. 1 Cr.
  7. 100% of the investment should come within 2 years from the date of possession with an extension of a year if the delay is beyond control.
  8. The entire investment may be brought up front or in different stages as under:
  9. Before Allotment of land: Minimum to extent of land cost.
  10. Before approval of Building plan: Minimum 25% of proposed FDI.
  11. Before granting of OC/BCC: Minimum 50% of proposed FDI.
  12. Before commencement of project: 100% of proposed FDI.
  • Land is allotted on priority bases in FDI, in case of default the penalty would be 25% of prevailing land premium per year after the expiry of period. Transfer of open plot will not be allotted, it will have to be surrendered to MIDC.

Ascent Supply Chain Consultants Pvt Ltd (ASCC) can guide / assist you for obtaining priority allotment of industrial land under FDI through the Government in a following manner:-

  1. In depth study for selection of location.
  2. Confirming availability of Industrial Land
  3. Selection of plots and arranging site visit
  4. Guidance for submission of application
  5. Case representation to MIDC on behalf of the client.
  6. Liaison with MIDC
  7. Arranging Survey, Demarcation and Possession of the Land allotted by MIDC
  8. Execution of Agreement to Lease
  9. Monitoring entire process till agreement to Lease
  10. Providing full support and knowledge for allotment of land

For Further Details:

Mr.Sunil Khera : 9820626644

Ms. Daljeet Saluja: 9833834428

 

 

 

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