Exchange regimes in food processing Industry in India
A foreign company can initiate operations in India by incorporating company under the 1956 Companies Act through wholly owned subsidiaries and joint ventures. In such Indian companies foreign equity can be up to 100% relying on investor needs subjecting to caps of equity with respect of the area of tasks under the policy of FDI. Sectorial equity procedures and caps and Foreign Direct Investment policy details can be acquired from Indian Government, Industrial Promotion and Policy Department.
Under automatic route foreign direct investment is now permitted in entire sectors except a few sectors including services sector where the notified and existing sectoral policy does not allow foreign direct investment beyond ceiling. Under the Automatic Route no precedent approval is needed for foreign direct investment. To the RBI within 30 days of shares issues or inward remittances to nonresidents is needed under the automatic route. RBI has described a new form, where form FC-GPR for representing issues shares to foreign investors by the company of India. Under the automatic rule foreign Investment consideration not covered for approval of government on the FIPB (Foreign Investment Promotion Board) recommendations.
Thus India is moving towards tax systems and policies reforming to facilitate the economic tasks of globalization. For foreign companies the corporate tax rate is around 40 percent. Under the laws of tax the average tax rate is lesser than on account of different exemptions and deductions are available. In special economic zones establishment, tax holidays are available to make industry competitive globally.