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Our Bureau

New Delhi , March 16

THE Government on Wednesday clarified that foreign direct investment (FDI) proposals in sectors that qualify for automatic approval would require prior Government approval in case the foreign investor has an existing joint venture or technology transfer agreement or trademark agreement as on January 12, 2005.

On January 12 this year, the Government had scrapped the Press Note 18 that made it mandatory for the foreign investor to obtain a no objection certificate (NOC) from the Indian partner in the joint venture. The same day the Government issued Press Note 1 of 2005 series that scrapped the requirement of the NOC.

Today the Government clarified that in case the foreign investor wants to set up a venture in the same field that the joint venture company is operating, the foreign investor would require prior approval from the Centre.

However, the Government has retained the earlier definition of "same field" as the 4-digit National Industrial Classification (NIC) 1987 code.

It has also been clarified that proposals in the information technology sector, investments by multinational financial institutions and in the mining sector for same area/mineral, that were exempted from the application of Press Note 18, would continue to be exempted from the requirement of getting prior approval from the Government.

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