Export credit agencies like the US Exim bank, the Japanese Exim Bank, and ECGC of the UK etc. to obtain commercial borrowing from the capital market.
External Commercial Borrowing (ECB)
Export credit agencies like the
US Exim bank, the Japanese Exim Bank, and ECGC of the UK etc. to obtain
commercial borrowing from the capital market.
The Government of India
liberalized its policy towards foreign investment in 1991 to permit automatic
approval for foreign investment up to 51 percent equity in 34 industries. The
Foreign Investment Promotion Board (FIPB) was also set up to process
applications in cases not covered by automatic approval. During 1992-93 several
additional measures were taken to encourage direct foreign investment,
portfolio investment, NRI investment, etc.
Foreign
Collaboration
During the early phase of the
planning era, the national policy towards foreign capital did recognize the
need for foreign capital, but decided not to permit it a dominant position.
Consequently foreign collaborations had to keep their equity within the ceiling
of 49 % and allow the Indian counterpart a majority stake. Moreover, foreign
collaborations were to be permitted in priority areas, more especially those in
which we had not developed our capabilities.
But in an overall sense, our
policy towards foreign collaborations remained restrictive and selective.
Consequently, during 1961-70 a total of 2,475 foreign collaborations were
approved and during the next decade (1971 – 80) another 3, 041 collaborations
were sanctioned.
It was only during the eighties
that government relaxed its policy towards foreign collaborations. This was
done specifically in respect of investors from Oil Exporting Developing
countries with well-defined package exemptions. This was followed by Technology
Policy Statement (TPS) in January 1983.The objective of the policy was to
acquire imported technology and ensure that it was of the latest type
appropriate to the requirements and resources of the country.
Tags : Business Environment and Law-Foreign Capital And Collaboration
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