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The FDI Inflows to Agriculture Services are allowed up to 100% and allowed through the automatic route covering

horticulture, floriculture, development of seeds, animal husbandry, pisciculture, aqua culture, cultivation of
vegetables, mushroom and services related to agro and allied sectors. Only in Tea sector, 100% FDI is allowed,
including, plantations of tea. 

In India, agriculture is an important sector of the Indian economy and accounts for almost 19% of Indian gross
domestic products (GDP). Agriculture is the main stay of the Indian economy as it forms the backbone of rural India
which inhabitants more than 70% of total Indian population.

The Ministry of Agriculture, the Ministry of Rural Infrastructure, and the Planning Commission of India are the main
governing bodies that define the future role of agriculture in India and it aims at developing agricultural sector of India.
No FDI / NRI / OCB is allowed in the Indian Agriculture sector. Only in Tea sector 100% FDI is allowed, including
plantations of tea. This requires Government of India approvals. Further, it requires compulsory divestment of 26%
equity in favor of the Indian partner or Indian public within a maximum period of five years. This also requires
approval from the concerned state government in case of change in use of land for such activities. And this holds true
for any fresh investments in the above-mentioned sector.

FDI in Indian agriculture sector and the latest developments are as follows:

 100% foreign direct investment (FDI) allowed through the automatic route covering horticulture,
floriculture, development of seeds,animal husbandry, pisciculture, aqua culture, cultivation of vegetables,
mushroom and services related to agro and allied sectors
 Farm credit target of Rs.225,000 crore for 2007-08 has been set with an addition of 50 lakh new farmers
to the banking system
 35 projects have been completed in 2006-07 and additional irrigation potential of 900,000 hectares to be
created and training of farmers arranged
 A pilot programme for delivering subsidy directly to farmers have been arranged
 Loan facilitation through Agricultural Insurance and NABARD has also been facilitated
 Corpus of Rural Infrastructure Development Fund to be raised

FDI Inflows to Agriculture Services also facilitated growth of other allied areas, like the following:

 Irrigation
 Roads
 Housing
 Water Supply
 Electrification
 Telecommunication Connectivity

FDI Inflows to Agriculture Services has effected development of rural infrastructure, like -

 To connect 66,800 habitations with population over 1000 with all weather roads
 To construct 1,46,000Km of new rural roads
 To upgrade and modernize 1,94,000Km of existing rural roads
 Total investment of ` 1,74,000 crore envisaged under "Bharat Nirman", investment on rural roads
estimated to be at ` 48,000 crore
 To provide corpus of ` 8000 crore to Rural Infrastructure Development Fund (RIDF)

Last Updated on 3/18/2011

The economy of India is the third largest in the world as measured by purchasing power parity (PPP), with a gross
domestic product (GDP) of US $3.611 trillion. When measured in USD exchange-rate terms, it is the tenth largest in
the world, with a GDP of US $800.8 billion (2006). India is the second fastest growing major economy in the world,
with a GDP growth rate of 8.2% at the end of the 4th quarter of 2009-2010. However, India's huge population results
in a per capita income of $3,300 at PPP and $714 at nominal.

The economy is diverse and encompasses agriculture, handicrafts, textile, manufacturing, and a multitude of
services. Although two-thirds of the Indian workforce still earn their livelihood directly or indirectly through
agriculture, services are a growing sector and are playing an increasingly important role of India's economy. The
advent of the digital age, and the large number of young and educated populace fluent in English, is gradually
transforming India as an important 'back office' destination for global companies for the outsourcing of their
customer services and technical support. India is a major exporter of highly-skilled workers in software and financial
services, and software engineering.

India followed a socialist-inspired approach for most of its independent history, with strict government control over
private sector participation, foreign trade, and foreign direct investment. However, since the early 1990s, India has
gradually opened up its markets through economic reforms by reducing government controls on foreign trade and
investment. The privatisation of publicly owned industries and the opening up of certain sectors to private and
foreign interests has proceeded slowly amid political debate.

India faces a burgeoning population and the challenge of reducing economic and social inequality. Poverty remains
a serious problem, although it has declined significantly since independence, mainly due to the green revolution and
economic reforms.

FDI up to 100% is allowed under the automatic route in all activities/sectors except the following which will require
approval of the Government: Activities/items that require an Industrial License;

Proposals in which the foreign collaborator has a previous/existing venture/tie up in India in the same or allied field 
All proposals relating to acquisition of shares in an existing Indian company by a foreign/NRI investor. All
proposals falling outside notified sectoral policy/caps or under sectors in which FDI is not permitted.

Foreign Direct Investment Policy


FDI policy is reviewed on an ongoing basis and measures for its further liberalization are taken. Change in sectoral
policy/sectoral equity cap is notified from time to time through Press Notes by the Secretariat for Industrial
Assistance (SIA) in the Department of Industrial

Policy announcement by SIA are subsequently notified by RBI under FEMA. All Press Notes are available at the
website of Department of Industrial Policy & Promotion.

FDI Policy permits FDI up to 100 % from foreign/NRI investor without prior approval in most of the sectors
including the services sector under automatic route. FDI in sectors/activities under automatic route does not require
any prior approval either by the Government or the RBI. The investors are required to notify the Regional office
concerned of RBI of receipt of inward remittances within 30 days of such receipt and will have to file the required
documents with that office within 30 days after issue of shares to foreign investors.
Automatic Route
All activities which are not covered under the automatic route prior Government approval for FDI/NRI shall be
necessary. Areas/sectors/activities hitherto not open to FDI/NRI investment shall continue to be so unless otherwise
decided and notified by Government. An investor can make an application for prior Government approval even
when the proposed activity is under the automatic route.

Procedure for obtaining Government approval- FIPB


The Foreign Investment Promotion Board (FIPB) considers approving all proposals for foreign investment, which
requires Government approval. The FIPB also grants composite approvals involving foreign investment/foreign
technical collaboration.

For seeking the approval for FDI other than NRI Investments and 100% EOU, applications in form FC-IL should be
submitted to the Department of Economic Affairs (DEA), Ministry of Finance.

FDI from NRI & for 100% EOU


FDI applications with NRI Investments and 100% EOU should be submitted to the Public Relation & Complaint
(PR&C) Section of Secretariat of Industrial Assistance (SIA), Department of Industrial Policy & Promotion. 

Proposals requiring Govt's approval


Application for proposals requiring prior Government's approval should be submitted to FIPB in FC-IL form. Plain
paper applications carrying all relevant details are also accepted. No fee is payable. The following information
should form part of the proposals submitted to FIPB: - 
Whether the applicant has had or has any previous/existing financial/ technical collaboration or trade mark
agreement in India in the same or allied field for which approval has been sought; and If so, details thereof and the
justification for proposing the new venture/ technical collaboration (including trademarks).

Applications can also be submitted with Indian Missions abroad who will forward them to the Department of
Economic Affairs for further processing. Foreign investment proposals received in the DEA are placed before the
Foreign Investment Promotion Board (FIPB) within 15 days of receipt. The decision of the Government in all cases
is usually conveyed by the DEA within 30 days.

FDI Prohibited
FDI is not permissible in Gambling and Betting, or Lottery Business, Business of chit fund, Nidhi Company,
Housing and Real Estate business, Trading in Transferable Development Rights (TDRs), Retail Trading, Atomic
Energy Agricultural or plantation activities or Agriculture (excluding Floriculture, Horticulture, Development of
Seeds, Animal Husbandry, Pisciculture and Cultivation of Vegetables, Mushrooms etc. under controlled conditions
and services related to agro and allied sectors) and Plantations(other than Tea plantations)

General permission of RBI under FEMA


RBI has granted general permission under Foreign Exchange Management Act (FEMA) in respect of proposals
approved by the Government. Indian companies getting foreign investment approval through FIPB route do not
require any further clearance from RBI for the purpose of receiving inward remittance and issue of shares to the
foreign investors.

The companies are, however, required to notify the Regional office concerned of the RBI of receipt of inward
remittances within 30 days of such receipt and to file the required documents with the concerned Regional offices of
the RBI within 30 days after issue of shares to the foreign investors or NRIs.

Besides new companies, automatic route for FDI/NRI investment is also available to the existing companies
proposing to induct foreign equity. For existing companies with an expansion programme, the additional
requirements include: 
the increase in equity level resulting from the expansion of the equity base of the existing company without the
acquisition of existing shares by NRI/foreign investors,
the money to be remitted should be in foreign currency and

proposed expansion programme should be in the sector(s) under automatic route. Otherwise, the proposal would
need Government approval through the FIPB. For this a Board Resolution of the existing Indian company must
support the proposal.

For existing companies without an expansion programme, the additional requirements for eligibility for automatic
approval are: that they are engaged in the industries under automatic route; 
the increase in equity level must be from expansion of the equity base and 
the foreign equity must be in foreign currency.

The earlier SEBI requirement, applicable to public limited companies, that shares allotted on preferential basis shall
not be transferable in any manner for a period of 5 years from the date of their allotment has now been modified to
the extent that not more than 20 per cent of the entire contribution brought in by promoter cumulatively in public or
preferential issue shall be locked-in.

Equity participation by international financial institutions such as ADB, IFC,


CDC, DEG, etc. in domestic companies is permitted through automatic route subject to SEBI/RBI regulations and
sector specific cap on FDI

ADR/GDR
An Indian corporate can raise foreign currency resources abroad through the issue of American Depository Receipts
(ADRs) or Global Depository Receipts (GDRs). Regulation 4 of Schedule I of FEMA Notification no. 20 allows an
Indian company to issue its Rupee denominated shares to a person resident outside India being a depository for the
purpose of issuing Global Depository Receipts (GDRs) and/ or American Depository Receipts (ADRs), subject to
the conditions that:
the ADRs/GDRs are issued in accordance with the Scheme for issue of Foreign Currency Convertible Bonds and
Ordinary Shares (Through Depository Receipt Mechanism) Scheme, 1993 and guidelines issued by the Central
Government there under from time to time The Indian company issuing such shares has an approval from the
Ministry of Finance, Government of India to issue such ADRs and/or GDRs or is eligible to issue ADRs/ GDRs in
terms of the relevant scheme in force or notification issued by the Ministry of Finance, and

There are no end-use restrictions on GDR/ADR issue proceeds, except for an express ban on investment in real
estate and stock markets. The FCCB issue proceeds need to conform to external commercial borrowing end use
requirements; in addition, 25 per cent of the FCCB proceeds can be used for general corporate restructuring,.

Is not otherwise ineligible to issue shares to persons resident outside India in terms of these Regulations. There is no
limit upto which an Indian company can raise ADRs/GDRs. However, the Indian company has to be otherwise
eligible to raise foreign equity under the extant FDI policy.

A company engaged in the manufacture of items covered under Automatic route, whose direct foreign investment
after a proposed GDRs/ADRs/FCCBs issue is likely to exceed the percentage limits under the automatic route, or
which is implementing a project falling under Government approval route, would need to obtain prior Government
clearance through FIPB before seeking final approval from the Ministry of Finance.

Foreign currency convertible Bonds


FCCBs are issued in accordance with the scheme [the Scheme for issue of Foreign Currency Convertible Bonds and
Ordinary Shares (Through Depository Receipt Mechanism) Scheme, 1993] and subscribed by a non-resident in
foreign currency and convertible into ordinary shares of the issuing company in any manner, either in whole, or in
part, on the basis of any equity related warrants attached to debt instruments;

The eligibility for issue of Convertible Bonds or Ordinary Shares of Issuing Company is given as under: 
An issuing company desirous of raising foreign funds by issuing Foreign Currency Convertible Bonds or ordinary
shares for equity issues through Global Depositary Receipt 
Can issue FCCBs upto USD 50 Million under the Automatic route, 
From USD 50 -100 Million, the companies have to take RBI approval, 
From USD 100 Million and above, prior permission of the Department of Economic Affairs is required.

Preference Shares
Foreign investment through preference shares is treated as foreign direct investment. Proposals are processed either
through the automatic route or FIPB as the case may be, as per the following guidelines:

Foreign investment in preference share is considered as part of share capital and fall outside the External
Commercial Borrowing (ECB) guidelines/cap. Preference shares to be treated as foreign direct equity for purpose of
sectoral caps on foreign equity, where such caps are prescribed, provided they carry a conversion option. Preference
shares structured without such conversion option fall outside the foreign direct equity cap.

Duration for conversion shall be as per the maximum limit prescribed under the Companies Act or what has been
agreed to in the shareholders agreement whichever is less. The dividend rate would not exceed the limit prescribed
by the Ministry of Finance. Issue of preference shares should conform to guidelines prescribed by the SEBI and RBI
and other statutory requirements.

FDI in EOUs/SEZs/Industrial Park/EHTP/STP

Special Economic Zones


100% FDI is permitted under automatic route for setting up of Special Economic Zone. Units in SEZ qualify for
approval through automatic route subject to sectoral norms. Details about the type of activities permitted are
available in the Foreign Trade Policy issued by Department of Commerce. Proposals not covered under the
automatic route require approval by FIPB.

Export Oriented Units (EOUs)


100% FDI is permitted under automatic route for setting up 100% EOU, subject to sectoral norms. Proposals not
covered under the automatic route would be considered and approved by FIPB.

Industrial Park
100% FDI is permitted under automatic route for setting up of Industrial Park.

Electronic Hardware Technology Park (EHTP) Units All proposals for FDI/NRI investment in EHTP Units are
eligible for approval under automatic route. For proposals not covered under automatic route, the applicant should
seek separate approval of the FIPB.

Software Technology Park Units


All proposals for FDI/NRI investment in STP Units are eligible for approval under automatic route. For proposals
not covered under automatic route, the applicant should seek separate approval of the FIPB.

Capitalization of Import Payables


FDI inflows are required to be under the following modes:
By inward remittances through normal banking channels or By debit to the specified account of person concerned
maintained in an authorized dealer/authorized bank. Issue of equity to non-residents against other modes of FDI
inflows or in kind is not permissible.

However, Issue of equity shares against lump sum fee, royalty payable and external commercial borrowings (ECBs)
in convertible foreign currency are permitted, subject to meeting all applicable tax liabilities and sector specific
guidelines.
Exchange Control Management
FEMA
The  Reserve Bank of India's Exchange Control Department, administers Foreign Exchange Management Act, 1999,
(FEMA) which has replaced the earlier act , FERA, with effect from June 1, 2000. The new legislation is for
"facilitating external trade" and "promoting the orderly development and maintenance of foreign exchange market in
India". FEMA extends to the whole of India. Under FEMA an Indian company with foreign equity participation is
treated at par with other locally incorporated companies. Accordingly, the exchange control laws and regulations for
residents apply to foreign-invested companies as well.

FDI in Indian Company


In terms of Section 6(3) (b) of Foreign Exchange Management Act. 1999 Reserve Bank regulates transfer or issue of
any security by a person resident outside India read with Notification No. FEMA 20/2000-RB dated May 3, 2000

Issue of Rights/ Bonus Shares


General permission is available to Indian companies to issue Right/Bonus shares subject to certain conditions.
Entitlement of rights shares is not automatically available to investors who have been allotted such shares as OCBs.
Such issuing companies would have to seek specific permission from RBI, Foreign Exchange Department, Foreign
Investment Division, Central Office, Mumbai for issue of shares on right basis to erstwhile OCBs. However, bonus
shares can be issued to OCBs.

Issue of shares under ESOS scheme


A company may issue shares under this Scheme, to its employees or employees of its joint venture or wholly owned
subsidiary abroad who are resident outside India, directly or through a Trust subject to the condition that the scheme
has been drawn in terms of relevant regulations issued by the SEBI; and face value of the shares to be allotted under
the scheme to the non-resident employees does not exceed 5% of the paid-up capital of the issuing company.

Issue of shares under merger/amalgamation


An Indian corporate can raise foreign currency resources abroad through the issue of ADRs or GDRs. Regulation 4
of Schedule I of FEMA Notification no. 20 allows an Indian company to issue its Rupee denominated shares to a
person resident outside India being a depository for the purpose of issuing GDRs and/ or ADRs, subject to the
conditions that: 
the ADRs/GDRs are issued in accordance with the Scheme for issue of Foreign Currency Convertible Bonds and
Ordinary Shares (Through Depository Receipt Mechanism) Scheme, 1993 and guidelines issued by the Central
Government thereunder from time to time.

The Indian company issuing such shares has an approval from the Ministry of Finance, Government of India to issue
such ADRs and/or GDRs or is eligible to issue ADRs/ GDRs in terms of the relevant scheme in force or notification
issued by the Ministry of Finance, and Is not otherwise ineligible to issue shares to persons resident outside India in
terms of these Regulations.

Repatriation of investment Capital and profits Earned in India


All foreign investments are freely repatriable except for the cases where NRIs choose to invest specifically under
non-repatriable schemes. Dividends declared on foreign investments can be remitted freely through an Authorised
Dealer. 
Non-residents can sell shares on stock exchange without prior approval of RBI and repatriate through a bank the sale
proceeds if they hold the shares on repatriation basis and if they have necessary NOC/tax clearance certificate issued
by Income Tax authorities. For sale of shares through private arrangements, Regional offices of RBI grant
permission for recognized units of foreign equity in Indian company in terms of guidelines indicated in Regulation
10.B of Notification No. FEMA.20/2000 RB dated 3rd May 2000. The sale price of shares on recognised units is to
be determined in accordance with the guidelines prescribed under Regulation 10B (2) of the above Notification.

Profits, dividends, etc. (which are remittances classified as current account transactions) can be freely repatriated.
Transfer of shares/debentures
A person resident outside India (Other than NRI and OCB) may transfer by way of sale or gift the shares or
convertible debentures to any person resident outside India (including NRIs); provided transferee has obtained prior
permission of SIA/FIPB to acquire the shares if he has previous venture or tie-up in India in same field or allied
field 
NRI or OCB may transfer by way of sale or gift the shares or convertible debentures held by him or it to another
non-resident Indian; provided transferee has obtained prior permission of Central Government to acquire the shares
if he has previous venture or tie-up in India in the same field or allied field 
The person resident outside India may transfer any security to a person resident in India by way of gift. A person
resident outside India may sell the shares and convertible debentures of an Indian company on a recognized Stock
Exchange in India through a registered broker.

Current Account transactions


Prior approval of the RBI is required for acquiring foreign currency above certain limits for the following purposes: 
Holiday travel over US$ 10,000 p.a. 
Gift / donation over US$ 5,000 / US$ 10,000 per beneficiary p.a. 
Business travel over US$ 25,000 per person 
Foreign studies as per estimate of institution or US$ 100,000 per academic year 
Architectural / consultancy services procured from abroad over US$ 1,000,000 per project 
Remittance for purchase of Trade Mark / Franchise 
Reimbursement of pre incorporation expenses over US$ 100,000 
Remittances exceeding US$ 25,000 p.a. (over and above ceilings prescribed for other remittances mentioned above)
by a resident individual for any current account or capital account transaction. 
In certain specified cases, prior approval of the ministry concerned is needed for withdrawal of foreign exchange,
such as: - 
Remittance of freight of vessel chartered by a PSU, 
Payment of import through ocean transport by a Govt. Department or a PSU on C.I.F basis, 
Multi-modal transport operators making remittance to their agents abroad.

Acquisition of Immovable propert by Non-resident


A person resident outside India, who has been permitted by Reserve Bank to establish a branch, or office, or place of
business in India( excluding a Laison Office), has general permission of Reserve Bank to acquire immovable
property in India , which is necessary for, or incidental to, the activity. However, in such cases a declaration , in
prescribed form (IPI), is required to be filed with the Reserve Bank, within 90 days of the acquisition of immovable
property.

Foreign nationals of non-Indian origin who have acquired immovable property in India with the specific approval of
the Reserve Bank can not transfer such property without prior permission from the Reserve Bank of India.

Acquisition of Immovable property by NRI


An Indian citizen resident outside India (NRI) can acquire by way of purchase any immovable property in India
other than agricultural/ plantation /farm house. He may transfer any immovable property other than agricultural or
plantation property or farm house to a person resident outside India who is a citizen of India or to a person of Indian
origin resident outside India or a person resident in India.

External trade and investment


Global trade relations
Share of top five investing countries in FDI inflows. (1991–
2004
Inflows
Rank Country Inflows (%)
(Million USD)
Until the liberalisation of 1 8,898 34.49%
1991, India was largely and { }   Mauritius
intentionally isolated from
2  United States 4,389 17.08%
the world markets, to protect { } 
its fledging economy and to
achieve self-reliance. Foreign 3 1,891 7.33%
trade was subject to import { }   Japan
tariffs, export taxes and
4 1,847 7.16%
quantitative restrictions, { }   Netherlands
while foreign direct
investment was restricted by { }   United
upper-limit equity
5 1,692 6.56%
participation, restrictions on Kingdom
technology transfer, export
obligations and government approvals; these approvals were needed for nearly 60% of new FDI in the industrial
sector. The restrictions ensured that FDI averaged only around $200M annually between 1985 and 1991; a large
percentage of the capital flows consisted of foreign aid, commercial borrowing and deposits of non-resident Indians.

The Bombay Stock Exchange is one of the two largest stock markets in India. Its index is used to gauge the strength
of the Indian economy.India's exports were stagnant for the first 15 years after independence, due to the
predominance of tea, jute and cotton manufactures, demand for which was generally inelastic. Imports in the same
period consisted predominantly of machinery, equipment and raw materials, due to nascent industrialisation. Since
liberalisation, the value of India's international trade has become more broad-based and has risen to Rs. 63,080,109
crores in 2003-04 from Rs.1,250 crores in 1950-51. India's major trading partners are China, the US, the UAE, the
UK, Japan and the EU. The exports during August 2006 were $10.3 billion up by 41.14% and import were $13.87
billion with an increase of 32.16% over the previous year.
India is a founding-member of General Agreement on Tariffs and Trade (GATT)since1947 and its successor, the
World Trade Organization. While participating actively in its general council meetings, India has been crucial in
voicing the concerns of the developing world. For instance, India has continued its opposition to the inclusion of
such matters as labour and environment issues and other non-tariff barriers into the WTO policies.

Balance of payments Since independence, India's balance of payments on its current account has been negative.
Since liberalisation in the 1990s (precipitated by a balance of payment crisis), India's exports have been consistently
rising, covering 80.3% of its imports in 2002–03, up from 66.2% in 1990-91. Although India is still a net importer,
since 1996–97, its overall balance of payments (i.e., including the capital account balance), has been positive,
largely on account of increased foreign direct investment and deposits from non-resident Indians; until this time, the
overall balance was only occasionally positive on account of external assistance and commercial borrowings. As a
result, India's foreign currency reserves stood at $141bn in 2005-06.

India is a net importer: in 2005, imports were $89.33bn and exports $69.18bn.India's reliance on external assistance
and commercial borrowings has decreased since 1991-92, and since 2002-03, it has gradually been repaying these
debts. Declining interest rates and reduced borrowings decreased India's debt service ratio to 14.1% in 2001–02,
from 35.3% in 1990–91. As the fourth-largest economy in the world, India is undoubtedly one of the most preferred
destinations for foreign direct investments (FDI); India has strength in information technology and other significant
areas such as auto components, chemicals, apparels, pharmaceuticals and jewellery. India has always held promise
for global investors, but its rigid FDI policies were a significant hindrance in this regard. However, as a result of a
series of ambitious and positive economic reforms aimed at deregulating the economy and stimulating foreign
investment, India has positioned itself as one of the front-runners of the rapidly growing Asia Pacific Region. India
has a large pool of skilled managerial and technical expertise. The size of the middle-class population at 300 million
exceeds the population of both the US and the EU, and represents a powerful consumer market.

India 's recently liberalised FDI policy (2005) allows up to a 100% FDI stake inventures.Industrial policy reforms
have substantially reduced industrial licensing requirements, removed restrictions on expansion and facilitated easy
access to foreign technology and foreign direct investment FDI. The upward moving growth curve of the real-estate
sector owes some credit to a booming economy and liberalized FDI regime. InMarch 2005, the government
amended the rules to allow 100 per cent FDI in the construction business. This automatic route has been permitted in
townships, housing, built-up infrastructure and construction development projects including housing, commercial
premises, hotels, resorts, hospitals, educational institutions, recreational facilities, and city- and regional-level
infrastructure.

ndia fertilizer industry is one industry with immense scopes in the future. India is primarily agriculture oriented country
and its economy is highly dependent on the agrarian produce. 

The majority of the populace of India lives in rural areas and the foremost occupation in the villages is agriculture.
Developments pertaining to different industries are being made on a massive scale to change the country's economy
from an agrarian one to a industrial one. It is extremely important for the fertilizer industry India to have development
in terms of technologically advance manufacturing process and innovative new-age products. The first fertilizer
manufacturing unit in India was set up in the year 1906 at Ranipat in Chennai. 

In the present scenario, there are more than 57 large and 64 medium and small fertilizer production units under the
India fertilizer industry. The main products manufactured by the fertilizer industry in India are phosphate based
fertilizers, nitrogenous fertilizers, and complex fertilizers. The fertilizer industry in India with its rapid growth is all set
to make a long lasting global impression. 

Some of the public sector companies in India fertilizer industry:

 National Fertilizers Limited


 Fertilizers & Chemicals Travancore Limited
 Rashtriya Chemicals & Fertilizers Limited
 Madras Fertilizers Limited
 Steel Authority Of India Limited
 Neyveli Lignite Corporation Limited
 Paradeep Phosphates Limited
 Pyrites, Phosphates & Chemicals Limited
 Hindustan Fertilizer Corporation Limited

Some of the private sector companies in India fertilizer industry:

 Chambal Fertilizers & Chemicals Limited


 Ajay Farm-Chem Private Limited
 Balaji Fertilizers Private Limited
 Deepak Fertilizer and Petrochemicals Corporation Limited
 Bharat Fertilizer Industries Limited
 Coromandal Fertilizers Limited
 Gujarat Narmada Valley Fertilizer Co. Limited
 Meerut Agro Chemicals Private Limited
 Duncans Industries Limited
 Karnataka Agro Chemicals
 Godavari Fertilizers & Chemical Limited
 Shri Amba Fertilizers (I) Private Limited
 Tuticorin Alkali Chemi & Fertilizer Limited
 Gujarat State Fertilizers & Chemicals Limited
 Indo-Gulf Fertilizers & Chemicals Corporation Limited
 Southern PetroChemical Industries Corporation Limited
 Maharashtra Agro Industrial Development Corporation
 Zuari Industries Limited- Fertilizer Limited
 Mangalore Chemicals & Fertilizers Limited

abstract:

100% FDI is allowed in fertilizers under the automatic route in India. FDI Inflows to Fertilizers between August 1991
and December 2005 has been 78.22 million US dollars. FDI inflows to fertilizers are beneficial for the expansion of
the fertilizer industry in India. 

Fertilizers industry in India:

Fertilizers industry in India has played an important role in making the country self sufficient in the production of food
grain. The first production unit of fertilizers in India was set up in Ranipet with the production capacity of 6000 MT per
year. The various kinds of fertilizers produced by the industry of fertilizers in India are Urea, SSP, Complexes, and
DAP. The government of India has allowed foreign direct investment in the fertilizers industry of the country.

FDI inflows to fertilizers industry in India:

Foreign Direct Investment (FDI) in fertilizers in India is allowed up to 100% under the automatic route in India. The
total amount of FDI Inflows to Fertilizers industry in India was US$ 78.22 million between August 1991 and December
2005. The total percentage of FDI Inflows to Fertilizers industry in India stood at 0.26% out of the total foreign direct
investment in the country during August 1991 to December 2005. 

Bayer Crop of Germany was given the approval in 2003, to invest ` 74 crores in Aventis Crop Science in India
involved in the production of fertilizers and pesticides. Through this investment Bayer Crop increased its stake in
Aventis Crop from 67.08 % to 100%. This made Aventis Crop a fully owned subsidiary of Bayer Crop.

Advantages of FDI Inflows to Fertilizers industry in India:

The various advantages of FDI Inflows to Fertilizers industry in India are -

 Growth and expansion of fertilizer industry in India.


 Use of improved technology.
 Better quality fertilizers that are more effective for agriculture.

Last Updated on 3/23/2011

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