PN 1997

CHAPTER - I 125
EXHIBIT NO.58
PRESS NOTE NO.1L (1997 Series)
GUIDELINES FOR INDUSTRIAL LICENCES FOR SUGAR FACTORIES
Subject: Guidelines for considering applications v) The basic criterion for grant of licence of
for industrial licenses for sugar factories new sugar units would be cane availability
or the potential for the development of
The Government of India have reviewed
sugarcane or both.
Guidelines for licensing new and expansion of existing
sugar factories issued vide this Ministry's Press Note vi) Other things being equal, preference in
No. 16(1991) dated 8.11.91. The existing guidelines licensing will be given to the proposals
need revision in order to take into account the from the Growers' Cooperative Societies.
changes in the business scenario following economic However, industrial licence issued to such
liberalisation, the need for introducing simplified and a cooperative cannot be transferred to any
transparent procedures and the technological changes other entity.
that have taken place in the sugar industry over the vii) All applications for expansion of the
years. In supersession of the aforesaid Press Note, existing factories will be cleared
Government has now formulated the following revised automatically.
guidelines:
viii) Applications for grant of industrial licenses
i) New Sugar factories will continue to be for the establishment of new sugar
licensed for a minimum economic capacity factories as well as expansion of existing
of 2500 tonnes cane crushed per units should be submitted to the Secretariat
day(TCD). There will not be any maximum for Industrial Assistance(SIA) in the
limit on such capacity. Department of Industrial Policy and
ii) Preference in licensing would be given to Promotion, Ministry of Industry, New
the proposals involving larger capacity, Delhi in Form IL, along with the prescribed
modern technology and development of fee of Rs.2500/-. The applications received
integrated complexes producing value for grant of licences would be referred by
added products and co-generation of SIA to the Department of Food and the
power. concerned State Governments/UTs for
their comments. If no comments are
iii) For the consideration of application, a received from either Department of Food
revenue district will be taken as the unit. In or the concerned State Governments/
case more than one application is received UTs within one month after their
for any unit of operation, other things comments are asked for, it shall be deemed
being equal, priority will be given to the that they have no comments to offer. The
application received earlier. Licensing Committee would thereafter
iv) Licences of new sugar factories will be consider the application for industrial
issued subect to the condition that the licence and make appropriate
distance between the proposed new factory recommendations.
and an existing/already licenced sugar B. The procedure and guidelines, as given above,
factory should be not less than are brought to the notice of the entrepreneurs for
15 kilometers. their information and guidance.
F. No.10(20)/96-LP New Delhi, the 10th January, 1996
Forwarded to Press Information Bureau for wide publicity to the contents of the above Press Note.
Sd/-
(Ashok Kumar)
Joint Secretary to the Govt. of India
Press Information Officer, Press Information Bureau, New Delhi.
Note: LPress Note No.1(1997 Series) has been amended by Press Note No.6(1997 Series)
126 Industrial Policy Highlights
EXHIBIT NO.59
PRESS NOTE NO.2 (1997 Series)
EXPANSION OF LIST OF INDUSTRIES FOR AUTOMATIC APPROVAL FOR FOREIGN EQUITY
Subject: Expansion of List of Industries for 51% OR 74% would be determined in terms of the
Automatic Approval for foreign equity instant Press Note.
Under the liberalised polices and procedures 3. No automatic approval shall be granted by the
governing foreign investment and foreign technology RBI for any item reserved for the small scale sector
and transfer agreements as per the Statement of or for any other item which requires industrial licence
Industrial Policy, 1991, the list of 35 industries under the existing policy. The applicant shall have to
eligible for Automatic Approval by Reserve Bank of necessarily state in his/her application to RBI whether
lndia(RBI) for foreign equity up to 51% was published he/ she proposes to manufacture any item reserved
as ANNEX-III to this Ministry's Press Note No. for the small scale sector or not.
10(1992 Series) dated 24.6.1992
4. The foreign equity limits for automatic approval
2. On a review of the policy on foreign direct as per the attached lists would also be applicable to all
investment, it has been decided to include 3 categories proposals for Units in the Electronics Hardware
of industries/items relating to mining activities for Technology Park Schemes (EHTPs) and units under
foreign equity up to 50%, 13 additional categories of the Software Technology Park Schemes(STPs),
industries/items for foreign equity upto 51% and 9 wherever such proposals contain request for approval
categories of industries equity upto 74% in the list of for foreign direct investment as well. The other
industries/items eligible for automatic approval by parameters of eligibility with respect to these specific
the Reserve Bank of India. These industries are listed schemes(EHTPs, STPs) would be applicable in the
under the heading "Part 'A', Part' B' and Part 'C' of same manner as they are applicable for proposals not
ANNEXURE-III" appended to this Press Note. These containing any element of foreign investment under
lists would be a supplement to the existing list of 35 these schemes.
industries (presently listed under Annex-III of the
Industrial Policy) which qualify for automatic approval 5. The attached lists are based on the National
for foreign direct investment. In case any specific Industrial Classification of all Economic
item now shown in Part B or Part C of Annex-III, Activities(NIC), 1987. The entrepreneurs/investors
already features in the 35 sectors included in the should henceforth give description of their activities
existing Annexure-III of Press Note No.lO (1992 in this classification system while submitting their
Series) dated 24.6.92, the status of that item for application to the RBI/ Government for various
eligibility for automatic approval foreign equity up to industrial approvals.
F. No.10(31)/97-LP New Delhi, the 17th January, 1997
Forwarded to Press Information Bureau for wide publicity to the contents above Press Note.
Sd/-
(Ashok Kumar)
Principal Information Officer

Press Information Bureau,
New Delhi.
CHAPTER - I 127
EXHIBIT NO.59(Contd.)
ANNEXURE-III
Note 1: This list is based on NIC Code, 1987
Note 2: Items for which approval of foreign investment and/or foreign technology agreements is not
covered by automatic approval are:-
(i) Items reserved for the small scale sector;
(ii) Items which require licence under existing policy;
(iii) all items of aerospace and defence equipment whether specifically mentioned or not; and
(iv) all items related to production or use of atomic energy including carrying out of any process,
prepartory or ancillary to such production or use, under the Atomic Energy Act, 1962.
Note 3: Wherever the description in the attached list varies from the description against its assigned NIC
Code, the description as given in the list shall be treated as authentic and shall prevail over the
standard description for the given NIC Code. Where the description relates to a group of articles,
all sub-classifications under this Group shall be taken as inclusive unless specifically mentioned
otherwise.
ANNEXURE-III (Contd.)
PART 'A'
LIST OF INDUSTRIES/ITEMS FOR AUTOMATIC
APPROVAL FOR FOREIGN EQUITY UPTO 50%
SI. NIC CODE Description

NO. Division Group Class
1 2 3 4 5
A-1 12 MINING OF IRON ORE
120 Mining of Iron Ore
A-2 13 MINING OF METAL ORES OTHER THAN IRON ORE (Mining of
Uranium Group ores is not covered)
130 Mining of Manganese Ore
131 Chromite
132 Bauxite
134 Copper Ore
135 Mining of Lead and Zinc Ores.
A-3 15 MINING OF NON-METALLIC MINERALS NOT ELSEWHERE
CLASSIFIED
150 Mining and quarrying of rock aggregates, sand and clays
151 Mining/quarrying of minerals for construction other than rock aggregates,
sand and clays.
152 Mining of fertilizer and chemical minerals.
153 Mining of ceramic, refractory and glass minerals.
154 Salt mining and quarrying including crushing, screening and evaporating
in pans
155 Mining of Mica
159 Mining of other non-metallic minerals.
B-1 20,21 MANUFACTURE OF FOOD PRODUCTS
200
200.5 Preservation of meats except by canning
200.6 Processing and canning of meat
201 Manufacture of dairy products
201.1 Manufacture of milk powder, ice-cream, powder and condensed milk
except baby milk foods.
CHAPTER - I 129

1 2 3 4 5
201.2 Manufacture of baby milk foods.
201.3 Manufature of butter, cream, ghee, cheese and khoya etc.
201.4 Manufacture ofpasturised milk whether or not in bottles/polythene
packs etc.(plain or flavoured)
201,9 Manufacture of other dairy products n.e.c.
202 Canning and preservation of fruits and vegetables
202.1 Sun-drying of fruits and vegetables.
202.2 Artificial dehydration of fruits and vegetables
202.3 Radiation preservation of fruits and vegetables
202.4 Manufacture of fruits/vegetable juices and their concentrates, squashes
and powders.
202.5 Manufacture of sauces, jams, jellies and marmalades etc.
202.7 Canning of fruits and vegetables
202.9 Fruit and vegetable preservation n.e.c.
203 Processing, canning and preserving of fish, Crustacea and similar
foods.
204 Grain milling
204.1 Flour milling by power machine.
204.9 Other grain milling and processing activities n.e.c.
208 Production of common salt
209 Manufacture of cocoa products and sugar confectionery(including
sweetmeats).
209.1 Manufacture of cocoa products
218 Manufacture of starch and its derivatives
B-2 23 MANUFACTURE OF COTTON TEXTILES
235 Cotton spinning, weaving and processing in integrated mills.
B-3 24 MANUFACTURE OF WOOL, SILK AND MAN-MADE FIBRE
TEXTILES
242 Wool spinning, weaving and processing in integrated mills.

1 2 3 4 5
245 Spinning, weaving and processing of silk (textiles) in integrated mills.
247 Spinning, weaving and processing of man-made textiles fibres in
integrated mills.
247.1 Spinning of staple fibres in mills.
247.2 Spinning of staple fibres and weaving of artificial/ synthetic textile
fabrics in mills.
247.3 Weaving and processing(bleaching, dyeing and printing) of artificial/
synthetic textile fabrics in mills.
247.4 Composite artificial textile fibres mills (spinning, weaving and processing).
B-4 26 MANUFACTURE OF TEXTILE PRODUCTS
268 Manufacture of water-proof textile faebrics.
B-5 30 MANUFACTURE OF BASIC CHEMICALS & CHEMICALS
PRODUCTS(EXCEPT PRODUCTS OF PETROLEUM AND COAL)
300 Manufacture of industrial organic and inorganic chemicals
301 Manufacture of fertilizers and pesticide
302 Manufacture of plastics in primary forms; manufacture of synthetic
rubber.
303 Manufacture of paints, varnishes, and related products; artists' colours
and ink.
304 Manufacture of drugs, medicines and allied products.
306 Manufacture of man-made fibres.
309 Manufacture of chemical products n.e.c.
B-6 31 MANUFACTURE OF RUBBER, PLASTIC, PETROLEUM AND
COAL PRODUCTS
310 Tyre and tube industries
312 Manufacture of rubber products n.e.c.
313 Manufacture of plastic products n.e.c.
318 Manufacture of coke oven products
319 Manufacture of other coal and coal-tar products n.e.c.
CHAPTER - I 131

1 2 3 4 5
B-7 34 MANUFACTURE OF METAL PRODUCTS AND PARTS EXCEPT
MACHINERY AND EQUIPMENT
341 Manufacture of fabricated metal products.
341.1 Manufacture of railway and ship containers used in container-traffic.
341.2 Manufacture of gas cylinders(industrial or house-hold).
341.3 Manufacture of tanks, reservoirs and containers of metals n.e.c.
341.4 Manufacture of reinforced safes, vaults, strongroom doors and gates
and the likes (manufacture of almirahs and filling cabinets etc. is
classified in Group 342).
341.5 Manufacture of Steel trunks.
341.6 Manufacture of sanitary and plumbing fixtures and fitting of metals.
341.9 Manufacture of other fabricated metal products n.e.c.
344 Forging, pressing, stamping and roll-forming of metal, power metallurgy.
B-8 35&36 MANUFACTURE OF MACHINERY AND EQUIPMENT OTHER
THAN TRANSPORT EQUIPMENT
350 Manufacture of agricultural machinery and equipment and parts thereof.
351 Manufacture of machinery and equipment used by construction and
mining industries.
352 Manufacture of prime movers, boilers
353 Manufacture of industrial machinery for food and textile
industries(including bottling and filling machinery).
354 Manufacture of industrial machinery for other than food and textile
industries.
355 Manufacture of refrigerators, air-conditioners and fire fighting equipment
and their parts and accessories.
356 Manufacture of general purpose non-electrical machinery/ equipment,
their components and accessories n.e.c.
357 Manufacture of machine tools, their parts and accessories.
358 Manufacture of office, computing and accounting machinery and parts.

1 2 3 4 5
359 Manufacture of special purpose machinery/equipment, their
components and accessories n.e.c.
359.1 Manufacture of sewing and knitting machines.
359.2 Manufacture of weighting machinery.
359.3 Manufacture of washing and laundrying machines(including
centrifugal clothes dries).
359.5 Manufacture of filtering and purifying machinery for liquid and gases.
359.6 Manufacture of distilling and rectifying plants (including heat
exchangers).
359.8 Manufacture of parts and accessories n.e.c. for special purpose non-
electrical machinery/equipment n.e.c.
359.9 Manufacture of special purpose non-electrical machinery/equipment
n.e.c.
360 Manufacture of electrical industrial machinery apparatus and parts
thereof.
361 Manufacture of insulated wires and cables, including manufacture of
optical fibre cables.
362 Manufacture of accumulators primary cells and primary batteries.
363 Manufacture of electric lamps.
363.2 Manufacture of ultra-voilet or infra-red lamps.
363.3 Manufacture of discharge lamps; flourescent, hot-cathode or other
discharge lamps.
363.4 Manufacture of arc lamps.
363.5 Manufacture of flash bulbs used in photography.
B-9 70 LAND TRANSPORT (SUPPORT SERVICES)
708 Support services to land transport like operation of high-way bridges,
toll roads, vehicular tunnels.
B-10 71 WATER TRANSPORT(SUPPORT SERVICES)
712 Support services to water-transport like operation and maintenance of
piers, loading and discharging of vessels.
CHAPTER - I 133

1 2 3 4 5
B-11 73 SERVICE INCIDENTAL TO TRANSPORT NOT ELSEWHERE
CLASSIFIED
730 Cargo handling incidental to land transport.
731 Cargo handling incidental to water transport.
732 Cargo handling incidental to air transport
733 Renting and leasing(except financial leasing) of motor vehicles,without
operator, for passenger transport.
734 Renting and leasing(except financial leasing) of motor vehicles, without
operator, for freight transport.
739 Renting and leasing of refrigerated/cold transport.
B-12 85 RENTING AND LEASING NOT ELSEWHERE CLASSIFIED
850 Renting of transport equipment without operator.
850.9 Renting of other transport equipment n.e.c.
852 Renting of office accounting and computing machinery and equipment,
without operator.
853 Renting of other industrial machinery and equipment.
B-13 89 BUSINESS SERVICES NOT ELSEWHERE CLASSIFIED
893 Business and management consultancy activities.
893.2 Market Research Services.
895 Technical testing & analysis services.
899 Research & Development Services(excluding basic research and setting
up of R&D/academic institutions which would award degrees/diplomas/
certificates).
93 HEALTH AND MEDICAL SERVICES
ANNEXURE-III
(Contd.)
PART -'C'
LIST OF INDUSTRIES/ITEMS FOR AUTOMATIC
APPROVAL FOR FOREIGN EQUITY UPTO 74%

1 2 3 4 5
C-1 19 MINING SERVICES
190 Oil and Gas Field services, except Exploration and production services.
191 Services incidental to mining viz. drilling, shafting, reclamation of mines,
surveys/mapping - excluding services related to gold, silver and
precious/semi-precious stones.
C-2 33 BASIC METALS & ALLOYS INDUSTRIES
330 Manufacture of Iron ore pellets, pig iron, sponge iron and steel in
Primary/semi-finished/finished forms.
331 Manufacture of semi-finished Iron and Steel products in re-rolling mills,
cold-rolling mills and wire drawing mills.
332 Manufacturing of ferro-alloys.
333 Copper manufacturing
334 Brass manufacturing
335 Aluminium manufacturing
336 Zinc manufacturing
337 Casting of metals
339 Other non-ferrous metal industries, excluding Gold, Silver and Platinum.
38 OTHER MANUFACTURING INDUSTRIES
380 Manufacturing of medical, surgical, scientific and measuring equipment
except optical equipment.
380.1 Manufacture of medical/surgical equipment and orthopaedic
appliances(manufacture of apparatus based on the use of X-Ray or
other radiators is classified in Class 369.1)
380.2 Manufacture of industrial process control equipment (this class include
manufacture of apparatus used for continuous measurement and control
or variable such
CHAPTER - I 135

1 2 3 4 5
as temperature, presstire, viscosity etc. of materials and products as
they are being manufactured or otherwise processed).
380.3 Manufacture of regulating or controlling instruments and apparatus,
except industrial process control equipment.
380.4 Manufacture of supply meters for electricity, water or gas.
380.5 Manufacture of sensitive balance and mathematical calculating
instruments.
380.6 Manufacture of laboratory and scientific instruments n.e.c (includes
manufacture of non-optical microscopes, diffraction equipments;
apparatus for measuring or checking electrical quantities, e.g
oscilloscopes, spectrum analysers, voltmeters, with or without recording
device; apparatus for measuring non-electrical quantities, e.g. radiation
detectors and counters, cross-talk meters and other instruments specially
designed for telecommunications; apparatus for testing the physical
properties for materials, e.g. apparatus for testing hardness and other
properties of metals, for testing the wear and tear and other properties
of textiles, and for testing the physical properties of paper, linoleum,
plastic, rubber, wood, concrete and so forth; apparatus for carrying
out physical or chemical analysis, e.g. polarimeters, refractometers,
calorimeters, Orsob's apparatus, Ph-meters, viscometers, surface
tension instruments and so forth and instruments and apparatus for
measuring or checking the flow, level, pressure or other variables of
liquids or gases, manometers, heatmeters, and so forth, except industrial
process control equipment).
380.8 Manufacture of parts and accessories n.e.c. for instruments and

apparatus included in this group.
380.9 Manufacture of other medical surgical, scientific and measuring
equipment n.e.c. (includes manufacture of hydrometers, thermometers,
pedometer, techometers, balancing machines, test benches, comparators
(include optical comparators and other optical type measuring and
checking applicances and instruments); instruments for checking
watches or watch parts and so forth).

1 2 3 4 5
381 Manufacture of photographic, cinematographic and optical goods and
equipment (excluding photochemicals, sensitised paper and film).
388 Manufacture of items based on solar energy like solar cells, cookers,
air and water heating systems and other related items.
C-4 40 ELECTRIC GENERATION AND TRANSMISSION
400 Generation and transmission of electric energy.
400.1 Generation and transmission of electric energy produced in hydro-
electric power plants.
400.2 Generation and transmission of electric energy produced in coal based
thermal power plants.
400.3 Generation and transmission of electric energy produced in oil based
400.4 Generation and transmission of electric energy produced in gas based
C-5 43 NON-CONVENTIONAL ENERGY GENERATION ANB
DISTRIBUTION
C-6 50 CONSTRUCTION
501 Construction and maintenance of roads, railbeds, bridges, tunnels,
pipelines, ropeways, ports, harbours and runways.
503 Construction and Maintenance of waterways and water reservoirs.
504 Construction and Maintenance of hydroelectric projects.
505 Construction & Maintenance of power plants.
C-7 70 LAND TRANSPORT
707 Pipeline transport excluding Crude Oil, petroleum products and natural
gas pipelines.
C-8 71 WATER TRANSPORT
710 Ocean and Water transport
711 Inland water transport
C-9 74 STORAGE AND WAREHOUSING SERVICES
741 Warehousing of agricultural products with refrigeration (cold storages).
CHAPTER - I 137
EXHIBIT NO.60
GUIDELINES FOR CONSIDERATION OF FOREIGN DIRECT INVESTMENT PROPOSALS
BY FOREIGN INVESTMENT PROMOTION BOARD
The Government has taken series of steps to consideration of foreign direct investment proposals
further liberalise and streamline the procedures and by the Foreign Investment Promotion Board.
mechanism for approval of both domestic and foreign
A set of Guidelines announced in this regard is
direct investment in fulfilment of its commitment to
enclosed for general information and for information
provide greater transparency in decision making, the
of investors.
Government has announced a set of Guidelines for
F. No.10(32)/97-IP New Delhi, the 17th January, 1997
Sd/-
(Ashok Kumar)
Press Information Officer

New Delhi.
Note: L Press Note No.3(1997 Series) has been amended by Press Note No.4(1997 Series) &Press Note
No. 13(1997 Series).
Guidelines for the consideration of Foreign Direct Investment (FBI)

proposals by the Foreign Investment Promotion Board(FIPB)
The following Guidelines are laid-down to enable the Foreign Investment Promotion Board (FIPB) to
consider the proposals for Foreign Direct Investment (FDI) and formulate its recommendations.
1. All applications should be put before the FIBP by the SIA (Secretariat of Industrial Assistance)
within 15 days and it should be ensured that comments of the administrative ministries are placed before the
Board either prior to/or in the meeting of the Board.
2. Proposals should be considered by the Board keeping in view the time frame of 6 weeks for communicating
Government Decision (i.e. approval oflM/CCFI or rejection as the case may be).
3. In cases in which either the proposal is not cleared or further information is required, in order to obviate
delays presentation by applicant in the meeting of the FIPB should be resorted to.
4. While considering cases and making recommendations, FIBP should keep in mind the sectoral
requirements and the sectoral policies vis-a-vis the proposal(s).
5. FIPB would consider each proposals in totality (i.e. if it includes apart from foreign investment,
technical collaboration/industrial licence) for composite approval or otherwise. However, the FIBP's
recommendation would relate only to the approval for foreign financial and technical collaboration and the
foreign investor will need to take other prescribed clearences separately.
6. The Board should examine the following while considering proposals submitted to it for consideration.
i) Whether the items of activity involve industrial licence or not and if so, the considerations for
grant of industrial licence must be gone into.
ii) Whether the proposal involves tehenical collaborations and if so - (a) the source and nature of
technology sought to be transferred (b) the terms of payment (payment of royalty by 100%
subsidiaries is not permitted)
iii) Whether the proposal involves any mandatory requirement for exports and if so, whether the
applicant is prepared to undertake such obligation (this is for Small Industry units, as also for
dividend balancing and for 100% EOUs/EPZ units)
iv) Whether the proposal involves any export projection and if so, the items of export and the projected
destinations.
v) Whether the proposal has concurrent commitment under other schemes such as EPCG Scheme,
etc.
vi) In the case of Export Oriented Units(EOUs) whether the prescribed minimum value addition
norms and the minimum turn over of exports are met or not.
vii) Whether the proposal involves relaxation of locational restrictions stipulated in the industrial licensing
policy; and
viii) Whether the proposal has any strategic or defence related considerations.
CHAPTER - I 139
7. While considering proposals the following may be prioritised

(a) Items falling within Annexure-lll of the New Industrial Policy (i.e. those which do not qualify for
automatic approval).
(b) Items falling in infrastructure sector.
(c) Items which have an export potential.
(d) Items which have large scale employment potential and especially for rural people
(e) Items which have a direct or backward linkage with agro business/farm sector.
(f) Items which have greater social relevance such as hospitals, human resource development, life
saving drugs and equipment.
(g) Proposals which result in induction of technology or infusion of capital.
8. The following should be especially considered during the scrutiny and consideration of proposals.
(a) The extent of foreign equity proposed to be held (keeping in view sectoral caps if any - e.g. 24%
for SSI units, 40% for air taxi/airlines operators, 49% in basic/cellular/ paging etc. in Telecom
sector)
(b) Extent of equity with composition of foreign/NRI (which may include OCB)/resident Indians.
(c) Extent of equity from the point of view whether the proposed project would amount to a holding
company/wholly owned subsidiary/a company with dominant foreign investment (i.e. 76% or
more venture)
(d) Whether the proposed foreign equity is for setting up a new project (joint venture or otherwise) or
whether it is for enlargement of foreign/NRI equity or whether it is for fresh induction of foreign
equity/NRI equity in an existing Indian Company.
(e) In the case of fresh induction of foreign/NRI equity and/or in cases of enlargement of foreign/
NRI equity in existing Indian Companies whether there is a resolution of the Board of Directors
supporting the said induction/enlargement of foreign/NRI equity and whether there is a shareholders
agreement or not.
(f) In the case of induction of fresh equity in the existing Indian companies and/or enlargement of
foreign equity in existing Indian Companies, the reason why the proposal has been made and the
modality for induction/enhancement (i.e. whether by increase of paid up capital/authorised capital,
transfer ofshares(hostile or otherwise) whether by rights issue, or by what modality)
(g) Issue/transfer/pricing of shares will be as per SEB/RBI guidelines
(h) Whether the activity is an industrial or a service activity or a combination of both.
(i) Whether the item of activity involves any restriction by way of reservation for the small scale
sector
(j) whether there are any sectoral restrictions on the activity (eg. there is ban on foreign investment
in real estate while it is not so for NRI/OCB investment)
(k) Whether the items involves only trading activity and if so whether it involves export or both
export and import, or also includes domestic trading and if domestic trading whether it also
includes retail trading.
(l) whether the proposal involves import of items which are either hazardous, banned or detrimental
to environment (eg. import of plastic scrap or recycled plastics)
9. In respect of the industries/activities listed in Annex.III of the New Industrial Policy automatic approval
for majority equity holding (50/51/74 percent) is accorded by the Reserve Bank of India. FIPB may consider
recommending higher levels of foreign equity in respect of these activities keeping in view the special
requirements and merit of each case.
10. In respect of other Industries/activities the Board may consider recommending 61 per cent foreign
equity on examination of each individual proposal. For higher levels of equity Up to 74 per cent, the Board
may consider such proposals keeping in view COHBiderationB such as the extent of capital needed for the
project, the nature and quality of technology, the I-fequirements of marketing and management skills and the
commitment fof exports.
11. FIPB may consider and recommend proposals for 100 per cent foreign owned holding/subsidiary
companies based on the following criteria:
(a) where only "holding" operation is involved and all subsequent/downstream investments to be
carried out would require prior approval of the Government.
(b) where proprietary technology is sought to be protected or sophisticated technology is to be
brought in;
(c) where atleast 50% of the production is to be exported.
(d) proposals for consultancy; and
(e) proposals for power, road, ports and industrial model towns/industrial parks or estates.
12. In special cases, where the foreign investor is unable initially to identify an Indian Joint Ventue partner,
the Board may consider and recommend proposals permitting 100 per cent foreign equity on a temporary
basis on the condition that the foreign investor would divest to the Indian parties (either individual, joint
venture partners or general public or both) at least 26 per cent of its equity within a period of 3-5 years.
13. Similarly in the case of a joint venture, where the Indian partner is unable to raise resources for
expansion/technological upgradation of the existing industrial activity, the Board may consider and recommend
increase in the proportion/percentage (up to 100 per cent) of the foreign equity in the enterprise.
14. In respect of trading companies, 100 per cent foreign equity may be permitted in the case of the
activities involving the following:
i) exports;
ii) bulk imports with export/expanded warehouse sales;
iii) cash and carry wholesale trading;
iv) other import of goods or services provided atleast 75% is for procurement and sale of goods and
services along the companies of the same group.
15. In respect of the companies in the infrastructure/services sector where there is a prescribed cap for
foreign investment, only the direct investment should be considered for the prescribed cap and foreign
investment in an investing company should not be set off against this cap provided the foreign direct investment
in such investing company does not exceed 49 per cent and the management of the investing company is
with the Indian owners.
16. No condition specific to the letter of approval issued to a foreign investor would be changed or additional
condition imposed subsequent to the issue of a letter of approval. This would not prohibit changes in general
policies and regulations applicable to the industrial sector.
CHAPTER - I 141
17. Where in case of a proposal (not being 100% subsidiary) foreign direct investment has been approved
up to a designated percentage of foreign equity in the joint venture company, the percentage would not be
reduced while permitting induction of additional capacity subsequently. Also in the case of approved activities,
if the foreign investor(s) concerned wishes to bring in additional capital on later dates keeping the investment
on such approved activities. FIPB would recommend such cases for approval on an automatic basis.
18. As regards proposal for private sector banks, the application would be considered only after "in principle"
permission is obtained from the Reserve Bank of lndia(RBI).
19. The restrictions prescribed for proposals in various sectors as obtained, at present, are given in the
Annex and these should be kept in view while considering the proposals.
These Guidelines are meant to assist the FIPB to consider the proposals in an objective and transparent
manner. These would not in any way restrict the flexibility or bind the FIPB from considering the proposals
in their totality or making recommendations based on other criteria or special circumstances or features it
considers relevant. Besides there are in nature of administrative Guidelines and would not in any way be
legally binding in respect of any recommendation made by the FIBP or decisions to be taken by the Government
in cases involving Foreign Direct lnvestment(FDI).
These guidelines are issued without prejudic to the Government's right to issue fresh guidelines or
change the legal provisions and policies whenever considered necessary.
ANNEX
SECTOR SPECIFIC GUIDELINES FOR
FOREIGN DIRECT INVESTMENT
S.No. Sector Guidelines
1. Banking NRI 40% Foreign investment of upto 20% Is permitted.
2. Non-banking financial services i) Upto 61% foreign equity, no special conditiona are
attached except those requiring approval of
SEBI/RBI etc.
ii) For foreign equity beyond 51% but upto 75%, it is
necessary that foreign investment should be minimum
US $ 5 million and it should come in one lot.
iii) For foreign investment beyond 76% minimum foreign
investment should be US $ 60 million.
3. Domestic Air-Taxi Operations/Airlines i) Foreign equity upto 40% can be permitted on a caae-
by-case basis.
ii) 100% by NRIs.
4. Power Foreign investment in power sector can either be in the
form of a joint venture with an Indian partner or as a
fully-owned operation with 100% foreign equity.
5. Telecommunication (Basic, Value Added) In basic, Cellular Mobile and paging services, foreign
investments are limited to 49% subject to grant of licence
from DoT.
6. Drugs and Pharmaceuticals Industry Foreign investment upto 61% in the case of bulk drugs,
their intermediates and formulations thereof (except
those produced by the use of recombinant DNA
technology) are granted automatic approval by the RBI.
Other proposals are considered on merit on a case-by-
case basis by the Government Manufacturing activity
essential for FDI above 61% as per Drug Policy.
7. Petroleum Foreign companies can invest upto 100% of the equity
in any venture in petroleum sector.
8. Real Estate No foreign investment in this sector is permitted. NRIs/
OCBs are allowed.
9. Road and Highways Private sector including foreign equity participants upto
100% in the highways is envisaged on Build Operate
and Transfer(BOT) concept. Investors in identified
highway projects would be permitted to recover their
investment by way of collection of tolls for specific
periods. At the end of the agreed concession period,
the facilities will revert to the Government.
CHAPTER - I 143
Construction of bypasses, bridges and widening of high

density corridors, of National Highways have been
identified for four laning through the BOT route. The
Government has, in the Budget Session of 1995, passed
the necessary legislation for collection of toll tax. rhe
rates of toll charges as well as the period of concession
will be on the basis of competition/bids and land
requirement for he construction and operation of facilities
would be provided by the Government free from
encumbrances. Private parties would also be allowed
to develop service and rest areas along the roads
entrusted to them.
10. PortsIndian ports offer significant potential to foreign
investors in major operational and infrastructural areas.
The following areas have been identified for participation/
investment by the private sector.
(i) Leasing out existing assets of the Port.
(ii) Constrution/creation of additional assets,
such as
(a) Construction and operation of container
terminals.
(b) Construction and operation bulk, break bulk,
multipurpose and specialised cargo berths.
(c) Warehousing, Container Frieght Stations,
storage facilities and tank farms.
(d) Cranage/Handling Equipment
(e) setting up of captive power plants
(f) Dry docking and ship repair facilities
(iii) Leasing of equipment for port handling and leasing
of floating crafts from the private sector
(iv) Capitive facilities for Port based industries.
These areas indicative in nature. Further details regarding
participation by the foreign investors are available with
individual port authorities and the Ministry of Surface
Transport, Government of India.
11. Tourism This is a sector with immense possibilities for foreign
investment. 100% foreign equity is permissible in the
sector and automatic approvals are also granted by the
Reserve Bank of India for foreign equity upto 51% and
subject to specified parameters.
12. Mining I) Foreign equity participation of upto 50% in the

mining sector will be automatic except for except gold,
silver, diamonds and previous stones. For gold, silver,
diamonds and precious stones, approvals would be given
keeping in view inter alia, the following parameters.
a) The size of the project

b) Commitment of external resources for
funding project cost.
c) Track record of the company in the mining
sector
d) The level of technology sought to be
employed in the project.
e) Financial strength of the company
f) Level of the Indian equity in the Joint venture
at the mining stage for the JV partner/Indian
Partner.
For companies who seek to set up 100 per cent wholly
owned subsidiaries, permission may be given subject
to the condition that in case the company wishes to
enter into ajoint venture for investment in mining where
a foreign equity holding in excess of 50 per cent is
envisaged, prior approval of the FIBP would be taken.
13. Coal While this has been reserved for the public sector, private
and foreign investment is permitted in coal for capative
consumption only (generation of power) and for
washeries, etc.
14. Venture Capital Fund: An offshore venture capital company may contribute
100 per cent of the capital of a domestic venture capital
fund and may also set up domestic asset management
company to manage the fund.
VCFs and VCCs are permitted upto 40% of the paid up
corpus of the domestic VCF/VCCs
CHAPTER - I 145
EXHIBIT NO.61
GUIDELINES FOR NON-BANKING FINANCIAL SERVICES
The Government have announced a set of 3) Minimum Capitalization norms :

Guidelines for consideration of foreign direct
a) Where the foreign equity is less than 51%
investment proposals by the Foreign Investment
or equal to 51%=US $ 0.5 million
Promotion Board vide Press Note No.3 (1997 Series).
The Government in consultation with the RBI & b) Where tlie foreign equity is more than 51%
SEBI, have made certain changes in respect of but is less than equal to 75%=US $ 5
guidelines prescribed for Non-Banking Financial million
Services viz., item No.2 of the Annexure specifying
c) Where the foreign equity is more than
guidelines for Foreign Direct Investment in some
75%= US $ 50 million
specific sectors of the said press note.
d) 100% foreign owned NBFCs would act
The following are the norms for FDI in the
as a holding company and specific
non-banking financial sector:
activities would be undertaken by step-
1) All proposals for foreign equity down subsidiaries with minimum 25%
investment in NBFCs shall be considered domestic eauity.
by FIPB.
4) Scheduling of capitalisation:
2) Foreign investment in non-banking
financial services to be permitted in I) For foreign equity holding upto 75%:
The minimum capitalisation according to
I) Merchant Banking, the norms indicated in para 3 above to be
II) Underwriting, brought upfront.
III) Portfolio Management Services II) For foreign equity holding above 75%
IV) Investment Advisory Services, and upto 100%: US $ 7.5 million to be
V) Financial Consultancy, brought upfront and the balance in over
VI) Stock Broking, 24 months.
VII) Asset Management, 5) Domestic equity in the step-down
VIII) Venture Capital, subsidiaries of 100% foreign owned
holding companies may be scheduled by
IX) Custodial Services,
bringing 10% domestic equity upfront and
X) Factoring,
the balance domestic equity over a period
XI) Credit Reference Agencies, of 24 months.
XII) Credit Rating Agencies
Press Note No.3 (1997 Series) issued by
XIII) Leasing and Finance and Government on 17-1-97 may be deemed to have been
XIV) Housing Finance. amended to the above extent.
F. No.10(32)/97-IP New Delhi, the 30th April, 1997
Sd/-
(Dhiraj Mathur)
Deputy Secretary to the Govt. of India
New Delhi.
Note: L Press Note No.4(1997 Series) has been amended by Press Note No.13(1997 Series)
EXHIBIT NO.62
DELEGATION OF POWERS FOR AUTOMATIC & POST APPROVAL AMENDMENTS FOR EHTP & STP
Subject: Electronics Hardware Technology Park vi) The exports shall be made to GCA/HCA
(EHTP) Scheme and Software countries;
Technology Park (STP) Scheme
vii) The unit is amenable to bonding by the Customs,
Delegation of powers for automatic
and all the manufacturing operations are carried
approvals and post-approval
out in the same premises and the proposal does
amendments.
not envisage sending out of the bonded area
The entrepreneurs are aware that two schemes any RM or inter-mediate products for any other
called Electronics Hardware Technology Park manufacturing or processing activity.
(EHTP) scheme and Software Technology Parl
(STP) scheme are in existence for the manufacture viii) Proposals do not envisage foreign equity/ NRI
of electronics hardware and development of quity.
computer software, for 100% exports. The CONVERSION of DTA UNITS :
proposals for setting up units under these schemes
are considered by an InterMinisterial Standing Application for conversion of existing DTA
Committee (IMSC), chaired by the Secretary, units into EOUs, where there is no outstanding export
Department of Electronics. obligation under EPCG Scheme or Advanced
Licensing Scheme, will be allowed, if such DTA unit
2. Keeping in view the needs of electronics sector, satisfies the parameters for automatic approval as
which is growing at a fast pace, Government have mentioned above.
decided to simplify the procedure for granting
approvals under these schemes, as well as for post- 4. The applications, which fulfil the above criteria,
approval amendments. Automatic Approval should be submitted in the prescribed form, to the
Directors ofSTPs or the Designated Officers, as the
3. Applications, which fulfil the following case may be. All other proposals should be submitted
conditions, shall receive approvals, within 15 days,
to the Secretariat for Industrial Assistance in the
from the Directors of concerned STPS in respect
Department of Industrial Policy & Promotion, Udyog
of STP proposals; and the Designated officers in
Bhavan, New Delhi. The application form shall be
respect of EHTP proposals:-
submitted in 10 copies. The application will be
i) The project is not included in Schedule I or II accompanied by Crossed Demand Draft for
ofNotification No.477(E) dated 25.27.1991 RS.1OOO/- drawn in favour of Pay & Accounts
issued under the lndustries(Development & Officer, Department of Industrial Policy and
Regulation) Act, 1951; Promotion, Ministry of Industry, payable at the State
ii) The location of the project conforms to the Bank of India, Nirman Bhavan Branch, New Delhi.
locational policy, announced by Department of POST-APPROVAL AMENDMENTS
Industrial Policy & Promotion;
5. Government is conscious of the fact that the
iii) The export obligation laid down in the project parameters need revision during
respective EHTP scheme or STP scheme is implementation of the project, necessitating
fulfilled; amendments in the approval letters. For expeditious
iv) The GIF value of the imported capital goods disposal of such cases, powers are being delegated
required for the project does not exceed to the Directors of STPs/ the Designated Officers,
Rs. 10.00 crores. as the case may be, for following types of proposals:-
v) Foreign technology proposals envisaged, if any, i) Additional Import of Capital Goods : To allow
do not involve Lumpsum knowhow fee enhancement in the total value of imported CG,
exceeding USD 2(Two) million, net of taxes, to the extent of 50% of value approved originally
and 8% royalty on exports and 5% royalty on (whether under automatic route or by IMSC),
DTA sales, net of taxes, over a period of 5 subject to a maximum limit of Rs. 10.00 crore.
years from the date of commencement of One or more requests can be entertained in this
commercial production. regard.
CHAPTER - I 147
ii) Attestation of list of imported CG: To attest v) Extension of validity of Letters of

the list of imported CG required for the project, Permission/Intent: To extend the validity
within the value approved. of Letter of Intent/Permission by one year,
to enable the applicant to implement the
iii) Broad-banding: In case of EHTP proposals, the
project.
applicants may be allowed to manufacture
items, other than those specified in the approval vi) Disposal of Obsolete capital goods: To
letters, subject to the condition that other items allow disposal of obsolete capital goods,
fall in the category of electronics hardware; on payment of applicable duties. It shall
the design and production facilities ar e common be ensured that the machinery being
and have similar manufacturing process; import allowed for disposal has been used for a
of additional capital; goods is within the limits period of 5 years.
mentioned under (i) above; and the E.O. under vii) Import of office equipment: To import of
EHTP scheme is fulfilled. office equipment, up to 20% of the total
iv) Change of location: To permit change of CGvalue approved, subjectto amaximum
location from the place mentioned in the of Rs.25.00 lakh.
approval letter to another, provided:- Member-Secretary, IMSCS shall also exercise
these powers concurrently, in case of necessity.
a) there is no other change in terms &
conditions of the approval; 6. The summary of all cases approved under
b) the new location is within the territorial automatic route in terms of para 3 above by the
jurisdiction of the Director STP/ Directors of STPs/the Designated Officers, as well
Designated Officers; as post-approval amendments carried out by them
c) the new location can be customs-bonded; under delegated powers, shall be submitted to IMSC
regularly for ratification in its next meeting.
d) the new location also conforms to the
locational policy announced by 7. The jurisdiction of Directors of STPs and the
Department of Industrial Policy & Designated Officers of EHTP is annexed at Annexure
Promotion; I and II of this Press Note.
F. No.10(58)/92-IP New Delhi, the 21st May, 1997
Sd/-
(Dhiraj Mathur)
Deputy Secretary to the Govt. of India
New Delhi.
ANNEXURE-I
JURISDICTION OF THE DESIGNATED OFFICERS
UNDER EHTP SCHEME STATE/DESIGNATED OFFICERS:
1. Andaman & Nicobar 9. Goa

i. Director, Software Technology Park, i. Director, Software Technology Park,
Multi Storied Complex, Block III, UNIT No.35 & 38, Electronics Sadan,
Keonics Electronics City, Hosur Road, NO.II, MIDC Bhosari Block,
Bangalore-562158 Pune-411 026.
2. Andhra Pradesh 10. Gujarat
407, Maitri Vanam Complex, 3 LK Society,
Sanjeeva Reddy Nagar Post, Opp. Gurukul Drive-in-Road,
Hyderabad-500 038. Ahmedabad-380 052
3. Arunachal Pradesh 11. Haryana
Priyadarshini Mkt, 2nd Floor, 2nd Floor, Block IV,
CRP Square, Nayapalli, Ganga Shopping Complex,
Bhubaneshwar-751 012. Sector 29, Noida-201 303.
4. Assam 12. Himachal Pradesh
Priyadarshini Mkt, 2nd Floor, 2nd Floor, Block IV,
CRP Square, Nayapalli, Ganga Shopping Complex, Sector-29,
Bhubaneshwar-751 012. Noida-201 301.
5. Bihar 13. Jammu & Kashmir
Priyadarshini Mkt, 2nd Floor, 2nd Floor, Block IV
CRP Square, Nayapalli, Ganga Shopping Complex,
Bhubaneshwar-751 012. Sector 29, Noida-201 303.
6. Chandigarh 14. Kamataka
2nd Floor, Block IV, Ganga Shopping Multi Storied Complex, Block III,
Complex, Sector 29, Noida-201 303. Keonics Electronics City,
7. Daman Diu, Dadra Nagar Haveli Hosur Road, Bangalore-561 229
i. Director, Software Technology Park, 15. Kerala

A/78/7/2 Ground Floor, i. Director, Software Technology Park,
Flatted Factory Shed, JV Centre, Bakery Jn.
Electronics Estate GIDC, P.B. No.5517,
Gandhinagar-382 004. Thiruvananthapuram-695 034
8. Delhi 16. Madhya Pradesh
2nd Floor, Block IV, 2nd Floor, Block IV,
Ganga Shopping Complex, Ganga Shopping Complex, Sector-29,
Sector-29, Noida-201 303. Noida-201 303.
CHAPTER - I 149
17. Maharashtra Multi Storied Complex, Block III,

i. Director, Software Technology Park, Keonics Electronics City,
Unit No.35 & 38, Electronics Sadan Hosur Road, Bangalore-561 229
NO.II, MIDC Bhosari Block, 25. Tripura
Pune-411 026 i. Director, Software Technology Park,
18. Manipur Priyadarshani Mkt, 2nd Floor,
i. Director, Software Technology Park, CRP Square; Nayapalli,
Priyadarshani Mkt, 2nd Floor, Bhubaneshwar-751 012.
CRP Square, Nayapalli, 26. Uttar Pradesh
Bhubaneshwar-751012. i. Director, Software Technology Park,
19. Orissa 2nd Floor, Block IV,
Ganga Shopping Complex,
i. Director, Software Technology Park, Sector-29, Noida-201 303.
Priyadarshani Mkt, 2nd Floor,
CRP Square, Nayapalli, 27. West Bengal
Bhubaneshwar-751 012. i. Director, Software Technology Park,
20. Punjab Priyadarshani Mkt, 2nd Floor,
CRP Square, Nayapalli,
i. Director, Software Technology Park, Bhubaneshwar-751 012.
2nd Floor, Block IV,
Ganga Shopping Complex, 28. Lakshadweep
Sector-29, Noida-201 303. i. Director, Software Technology Park,
JV Centre, Bakery Jn.
21. Pondicherry P.B. No.5517,
i. Director, Software Technology Park, Thiruvananthapuram-695 034.
Multi Storied Complex, Block III, 29. Meghalaya
Keonics Electronics City,
Hosur Road, Bangalore-561 229. i. Director, Software Technology Park,
22. Rajasthan CRP Square, Nayapalli,
i. Director, Software Technology Park, Bhubaneshwar-751 012.
2nd Floor, Block IV, 30. Mizoram
Ganga Shopping Complex,
Sector-29, Noida-201 303. i. Director, Software Technology Park,
23. Sikkim CRP Square, Nayapalli,
i Director, Software Technology Park, Bhubaneshwar-751 012.
Priyadarshani Mkt, 2nd Floor, 31. Nagaland
CRP Square, Nayapalli,
Bhubaneshwar-751 012. i. Director, Software Technology Park,
24. Tamil Nadu CRP Square, Nayapalli,
i Director, Software Technology Park, Bhubaneshwar-751 012.
ANNEXURE-II
JURISDICTION OF DIRECTORS OF STP'S
SI. Designation and Area/

No. Address Jurisdiction
1. Director-in-Charge Maharashtra & Goa
STP-Pune
Electronics Sadan,
No.ll, MIDC Bhosari Block,
Pune - 411026
Tel.No.(212) 792000 792481
Fax No.(212) 792483
2. Director Uttar Pradesh, Delhi, Haryana
STP-Noida, Himachal Pradesh, Punjab,
Sector-29, Block-IV, Madhya Pradesh, Jammu &
2nd Floor, Ganga Shopping Complex, Kashmir & Chandigarh
Noida.
Tel.No.(011) 8922538, 8922483
Fax No.(OII) 8922538
3. Director, Kamataka, Tamil Nadu,
STP-Bangalore, Block III, Pondicherry & Andaman and Nicobar
Multi Storied Complex,
Keonics Electronics City,
Hosur Road, Bangalore - 561 229
Tel No.(080) 8520633, 8520444
Fax No.(080) 8520958
4. Director, Andhra Pradesh
STP-Hyderabad,
407, Maitri Vanam Complex,
Sanjeeva Reddy Nagar Post,
Hyderabad - 500 018
Tel.No.(040) 291477, 290817
Fax No.(040) 290652
5. Director-in-Charge Bihar & Orissa
STP-Bhubaneswar,
Priyadarshini Market,
(2nd Floor), CRP Square,
Nayapalli, Bhubaneswar - 751 012
Tel No.(0674) 407260, 207269
Fax No.(0674) 403669
6. Chief Executive Officer, Gujarat, Daman, Diu,
STP-Gandhinagar Dadar Nagar Haveli
3, L.K. Society,
Opp-Gurukul Drive-in-Road,
Ahmedabad-380052
Tel.No.(079)450976
Fax No.(079) 450976
CHAPTER - I 151
SI. Designation and Area/

No. Address Jurisdiction
7. Director, Kerala & Lakshadweep

STP-Thiruvananthapuram,
P.B.No.5517, J.V. Centre Bakery Jn.
Thiruvananthapuram - 695034
Tel.No.(0471) 64621, 67371, 61224
Fax No.(0471) 330037
8. Executive Incharge, West Bengal, Assam, Meghalaya,
STP-Calcutta, Nagaland, Manipur, Tripura,
Salt Lake Electronics Complex, Arunachal Pradesh, Mizoram
Block-GP, Sector-V, and Sikkim
Bidhannagar, Calcutta - 700 091
Tel No.(033) 3219668, 495997
Fax No.(033) 3219664.
9. Director, Rajasthan
STP-Jaipur,
2, Kanakpura Industrial Area,
Sirsi Road, Jaipur - 302012
Tel.No.(0141) 351981, 352926
Fax No.(0141) 312701
Head Quarters
10. Director,
Software Technology Park of India,
Department of Electronics,
Electronics Niketan,
6, CGO Complex, Lodhi Road,
New Delhi - 110 003.
Tel No.(O11) 4362811, 4363596
Fax No.(O11) 4364336
EXHIBIT NO.63
LOI GRANTED FOR NEW UNITS OF SUGAR
Subject: Letters of Intent Granted for New units 3. In order to safeguard interests of farmers,
of Sugar - Validity Period - Regarding. industry and consumers, it is necessary that the
licensed capacity is created to the intended time
For all industries retained under compulsory schedule. Accordingly, it has been now decided that
licensing, the applications filed for industrial license the initial validity period of the LOIs granted for
are considered in the Approval Committee concerned, setting up new units of sugar should be reduced to
and as per approval of the Government, letters of one year and to prescribe some milestones, the
intent (LOI) are issued in the first instance. The fulfillment of which would be a precondition for
LOI specifies the conditions which need to be fulfilled further extension of the period of validity of LOI.
before the LOI is converted into an industrial license.
The following are considered as important
In terms of Press Note No-15 of 1988 dated 10.6.88, milestones :
the LOI is valid for three years. Extension of validity
beyond three years needs to be considered in the (a) Acquisition of land for location of sugar mill.
Approval Committee concerned. (b) Commencement of civil works.
2. The guidelines for consideration of applications (c) Placement of order for plant and machinery.
for industrial licenses for sugar factories were revised (d) Filing of application for term loan (if required).
vide Press Note No. I of 1997 dated 10.1.97. Inter
alia, the guidelines provide for maintaining a minimum The applicant should fulfil conditions 1 and 2,
and one of the remaining two conditions and provide
distance criteria of 15 KM among sugar factories. It
documentary evidence to that effect to the
is seen that many of the letters of intent issued for
Administrative Ministry and the Approval Committee
sugar factories do not fructify and remain approvals
to qualify for further extensions of validity beyond
on paper for the entire initial validity period of three one year.
years. The location mentioned in such Letters of
Intent remains unavailable for other applicants and 4. Requests for change of location, if any, would
other locations less than 15 KM away from the have to be filed within 3 months from the date of
location mentioned in a valid LOI also cannot be issue of the LOI.
considered. If the entrepreneur is not serious, the 5. In terms of this Press Note, the LOIs already
farmers in the zone allocated to the proposed unit issued would be valid for a period of one year from
suffer for no fault of their own. Consumer interests the date of issue of this Press Note, or the present
too would be adversely affected. date of validity of the LOI, whichever is earlier.
F. No.10(15)/92-IP New Delhi, the 28th May, 1997
Sd/-
(Ashok Kumar)
New Delhi.
CHAPTER - I 153
EXHIBIT NO.64
REMOVAL OF STIPULATION RELATING TO MINIMUM EQUITY STAKE OF SIDC
Subject: Removal of stipulation relating to State Government Agencies in the joint venture by
Minimum Equity Stake of SIDC in Joint way of waiver, on the basis of specific request of
Venture and Assited Units. concerned bodies for the approvals issued in the past.
As per the existing policy relating to the pattern It is hereby further clarified that in line with
of share holding in the joint sector, the State Industrial the liberalised policy, in future when SIDCs submit
application for industrial licence for setting up of
Development Corporation (SIDC) and other State
new units in joint sector, they will not be required to
Government Agencies are required to hold atleast
hold 26% equity stake in the proposed joint venture.
26% equity in the paid up capital of the company
While applying for the industrial licence, the State
promoted by them in joint venture. The Government Government Agency may indicate the extent of
has issued Press Note No-3/1996 series to do away equity holding proposed to be held by it in the
with the stipulations relating to minimum equity stake proposed joint venture, which would be taken note
of State Industrial Development Corporation or other of while processing the application itself.
F. No.10(18)/96-IP New Delhi, the 1st July, 1997
Sd/-
(Ashok Kumar)
Press Information Bureau
New Delhi.
EXHIBIT NO.65
POLICY & PROCEDURE GOVERNING APPROVAL UNDER SCHEMES FOR 100% EOUs & EPZ
Subject: Policy & Procedure governing approval Zones', were also excluded from the purview of
under the schemes for 100% Export automatic approvals.
Oriented units (EOUs)and Export
With a view to further liberalise the procedure,
Processing Zone (EPZ) units - regarding.
Govt. have now decided that proposals envisaging
At present approvals are granted within 15 days 'sub-contracting' shall also qualify for automatic
for setting up 100% Export Oriented Units and the approval, provided other parameters, as laid down
units in the Export Processing Zones, provided the in Press Note No.3(95) are met. However, the 'sub-
proposals conform to the parameters laid down in contracting' shall be allowed as per the customs
Press Note No.3(1995 Series) dated 19.4.1995. One guidelines.
of the conditions to be fulfilled for automatic approval
is that the entire manufacturing operations should Similarly, the proposals for setting up 'private
be carried out in the same premises and the proposal bonded warehouses in the Export Processing Zones'
should not envisage 'sub-contracting' by sending any shall also receive automatic approval from the
Raw Materials/intermediate products for further Development Commissioner of the concerned EPZ,
manufacturing/processing activity outside the bonded if such proposals fulfill the other criteria for
premises. In addition, proposals for setting up automatic approval as laid down in Press Note
"private bonded warehouses in the Export Processing No.3(95).
F. No.10(53)/92-IP New Delhi, the 7th July, 1997
Sd/-
(Dhiraj Mathur)
Director
New Delhi.
CHAPTER - I 155
EXHIBIT NO.66
DELEGATION OF POWERS FOR POST APPROVAL AMENDMENTS FOR EHTP & STP
Subject: Electronics Hardware Technology Park b. he is a subscriber to the Articles and

(EHTP) scheme and SoftwareTechnology Memorandum of Association of the Company;
Park (STP) scheme - Delegation of c. he subscribes to the tune of at least 10% of the
powers for post-approval amendments. issued equity capital of the new Company, and;
Government (vide Press Note No.5(1997) d. the individual is a Director of the new Company.
dated 21.5.1997) had delegated certain powers to
B. For change from a Company to another
the Directors of STPs and the Designated officers
Company provided:
of EHTPs, to approve projects under STP/EHTP
schemes, as well as post-approval amendments. a. The transferee Company is a fully-owned
subsidiary of the Company holding the Letter
2. The Directors of DTPs and the Designated of Intent or Permission Letter or vice-versa;
officers have now been vested with powers to permit
additional import of Capital Goods up to Rs.lO.OO or
crore, without any I imitation of imported CG b. A new Company has been promoted for the
approved earlier, as mentioned earlier in Para 5(i) of purpose of implementing the Scheme after the
the Press Note. grant of Letter of Intent or Letter of Approval,
with at least 10% of the issued equity held by
3. In addition to the powers delegated vide Press
the existing Company; and
Note No.5(1997), the Directors of STPs and the
Designated officers of EHTPs shall also exercise The change of name would be permitted only
following powers :- if the new unit undertakes to take over the assets
and liabilities of the existing unit.
(i) Change in the name of implementing
(ii) Enhancement in value of imported CG due
agency:
to Exchange rate fluctuations:
The change in the name of the implementing
Enhancement in the value of imported CG, due
agency can be approved subject to the following
to exchange rate fluctuations, can be approved
conditions :-
without any upper limit.
A. For change from an individual to a Company The changes as given above, are brought to
provided: the notice of the entrepreneurs for their information
a. the new Company is promoted by the applicant; and guidance.
Sd/-
(Dhiraj Mathur)
Director
New Delhi.
EXHIBIT NO.67
LICENSING OF INDUSTRIAL EXPLOSIVES
'Industrial Explosives' is one of the industries preference would be given to Site-Mixed Slurry
requiring compulsory licensing as per the Industrial Explosives, and fresh capacity of expansion of
Policy, 1991. The Government has reviewed the capacity for Nitro Glycerine based explosives would
Policy for this sector taking into consideration the not be encouraged.
emerging technologies, safety and security of use,
and user preferences. It haa been decided that in The above decision is brought to the notice of
considering cases for creation of additional capacity, all entrepreneurs.
Sd/-
(Ashok Kumar)
Joint Secretary to Govt. of India
New Delhi.
CHAPTER - I 157
EXHIBIT NO.68
DELETION OF CERTAIN INDUSTRIES FROM LIST OF INDUSTRIES UNDER COMPULSORY LICENSING
Subject: Deletion of Certain Industries from the List 4. The dclicensing of these industries will,
of Industries under Compulsory Licensing however, be subject, to locational conditions as given
Subsequent to the announcement of New in Press Note dated 2nd August, 1991 and relevant
Industrial Policy in July 1991, the number of statutes/statutory/policy notifications such as The
industries under compulsory licensing has been Vegetable Oil Products (Standards of Quality) Order,
reduced from 18 to 14, with the deletion of 4 items 1975, Wild Life Protection Act, 1972, National Forest
requiring compulsory licensing, namely motor cars, Policy and Directions and decisions of the Hon'ble
entertainment electronics, white goods and leather. Supreme Court. The delicensing of the aforesaid
industries shall also not extend to items exclusively
2. To further liberalise the provisions in this regard,
reserved for manufacture in the small scale sector.
taking due note of the emerging technologies on the
one side and the available statutory provisions Items reserved for small scale sector shall continue
Government have decided to further do away with to attract the licensing provisions under the Industries
the licensing provisions in respect of 5 categories of (Development and Regulation) Act, 1951.
industries. It is expected that the present delicensing 5. The entrepreneurs who wish to avail of the
move shall contribute to greater industrial growth liberalised facility of delicensing for the above
and will give further impetus to the liberalisation of mentioned industry are requested to follow the same
industrial development by providing greater freedom procedure as laid down in the aforementioned Press
to the entrepreneurs to take investment and Note dated 2nd August, 1991 as amended from time
technology decisions in these sectors. to time.
3. The following is the list of industries which
6. The entrepreneurs who have been issued
Government have decided to remove from the list of
Letter(s) of Intent for mamifacture of items now
industries requiring compulsory licensing :-
falling under exempted category, need not file an
(i) Animal fats and oils; initial memorandum. In such cases the LOI holder
(ii) Tanned or dressed fur skins, chamois leather; shall only file Part B of the memorandum at the time
of commencement of commercial production against
(iii) Asbestos and asbestos-based products;
the LOI issued to them. It is however open to
(iv) Plywood, veneers of all types and other wood entrepreneurs to file an initial memorandum (in lieu
based products such as particle board, medium of the LOI/ IL held by them) if they so desire,
density fibre board/block board; and whenever any variation from the conditions
(v) Paper and newsprint except, bagase based stipulated in the Letter of Intent/Industrial Licence
units. is contemplated.
Sd/-
(Ashok Kumar)
New Delhi.
EXHIBIT NO.69
PROCEDURE RELATING TO APPROVALS FOR 100% EOUs FOR PETROLEUM REFINERIES
The Government have reviewed the procedure year. At the end of one year and on fulfillment of
relating to approvals for 100% Export Oriented Units milestones, which would include acquisition of land,
(EOUs) for petroleum Refineries. In view of slow mobilisation of subscription or sanction letter from
progress in implementation of approved projects, it Mutual Funds/Financial Institutions, evidence of
has been considered appropriate that some efforts initiated to secure institutional loans and tie
conditionalities be introduced as part of the approval up for export of products, conversion of the 'in-
process so as to ensure speedy implementation. It principle' approval to a final approval would be
has, therefore, been decided that in future, approval considered. In the event of nonfulfillment of the
for 100% EOUs for Petroleum Refineries would be aforesaid milestones within one year, the 'in-principle'
given in two stages. In the first stage an 'inprinciple' approval would automatically lapse.
approval will be given which will be valid for one 2. This is for general information of investors.
F. No.8(1)/97-FC(1) New Delhi, the 3rd September, 1997
Sd/-
(Ashok Kumar)

New Delhi.
CHAPTER - I 159
EXHIBIT NO.70
PROCEDURE FOR "FOREX BROKING"
In the Press Note No.4/1997 Series issued by "Forex Broking". However, the Minimum
this Department on 30th April, 1997, Foreign Direct Capitalisation norms would also be equally applicable
Investment was permitted in the 14 Non-Banking in the "Forex Broking" for foreign equity
Financial Services. It has since been decided to participation.
include "Forex Broking" in the list of activities opened
to foreign investors. The guidelines applicable for Press Note Nos.3(1997 Series) and 4 (1997
considering proposals for foreign equity participation Series) issued by Government on 17th Jan., 1997
in Non/Banking Financial Companies would equally and 30th April, 1997 may be deemed to have been
be applicable for foreign equity participation in the amended to the above extent.
F. No.10(32)/97-IP New Delhi, the 5th September, 1997
Sd/-
(Ashok Kumar)

New Delhi.
EXHIBIT NO.71
REVISED CONSOLIDATED LIST FOR AUTOMATIC APPROVAL FOR FOREIGN EQUITY UP TO 50%/51%/74%
Subject: Revised consolidated list ofindustries/ activities for which automatic approval is available
items for automatic approval for foreign for foreign equity upto 50% Part 'B' for foreign equity
equity up to 50%/51%/74% upto 51% and Part 'C' for foreign equity up to 74%.
Under the liberalised policies and procedures 3. The list at Annex-III is in this Press Note
covering foreign technology agreements and foreign supersedes the lists published earlier vide this
direct investment, the list of 35 industries eligible for Ministry's Press Note No.l0(1992 Series) and Press
automatic approval by Reserve Bank of lndia(RBI) Note No.2(1997 Series). The entrepreneurs/investors
for foreign equity upto 51% was published as are advised to give description of their activities for
Annex-III to the Statement on Industrial Policy, 1991. NIC, 1987 classification system while submitting
The list was detailed based on ITC(HS) Coding their applications to the Government/Reserve Bank
System and was published as Annex-III in this of India for various industrial approvals.
Ministry's Press Note No. 10(1992 Series) dated 24th
June, 1992. Subsequently, on review of policy on 4. Items for which approval for foreign investment
foreign direct investment, the Annex-III was is not covered by automatic approval are:-
expanded to include industries/items eligible for (i) Items reserved for small scale sector;
automatic approval by RBI for foreign equity upto
50%, 51% and 74%. The list of additional industries (ii) Items which require industrial licence under the
items, which was based on National Industrial existing policy
Classification(NIC) of all Economic Activities, 1987 (iii) All items for aerospace and defence equipment
was published as Annex-III to this Ministry's Press whether specifically mentioned or not; and
Note No.2(1997 Series) dated 17th January, 1997.
(iv) All items related to production or use of
2. The description of the 35 industries (Annex-
automatic energy including carrying out of any
III) included in the Press Note No. 10(1992 Series)
process, preparatory or ancillary to such
dated 24.6.1992 has also been re-cast on the basis
production or use, under Automatic Energy Act,
of National Industries Classification(NIC), 1987.
1962.
Further, with a view to avoid reference to two separate
lists, a consolidated list has been drawn and is 5. The existing conditions for automatic approval
appended as Annex-III to this Press Note. This of foreign technology agreements, remain
revised list is in three parts. Part'A' lists industries/ unchanged.
F. No.10(31)/97-IP New Delhi, the 8th October, 1997

Sd/-
(Dhiraj Mathur)
Director to Govt. of India
Press Information Officer, Press Information Bureau, New Delhi.
Copy to:-
1. NIC to put this on the SIA Website on the Internet
2. PRO Cell
3. PPS to Secretary(IPP)/PPS to Secretary (ID)/PPS to Secretary (SSI & ARI)/PPS to Secretary(HI) for
information and persual of Secretary.
4. AS&FA
5. JS(PK)/JS(AK)
6. All Directors/Deputy Secretaries in the Department of Industrial Policy & Promotion-for information and
necessary action.
Sd/-
(Dhiraj Mathur)
Director to Govt. of India
CHAPTER - I 161
Annex-III
LIST OF INDUSTRIES/ITEMS FOR AUTOMATIC APPROVAL
FOR FOREIGN EQUITY UPTO 50%/51%/74%
NOTES:
Note 1: This is based on NIC Code, 1987
Note 2: Wherever the description in the attached list varies from the description against its assigned NIC
Code, the description as given in the list shall be treated as authentic and ahall prevail over the
standard description for the given NIC Code. Where the description relates to a group of articles,
all sub-classifications under this Group shall be taken as inclusive unless specifically mentioned
otherwise.
PART 'A'
FOR FOREIGN EQUITY UPTO 50%

A-1 12 MINING OF IRON ORE
120 Mining of Iron Ore
A-2 13 MINING OF IRON ORES OTHER THAN IRON ORE
(Mining or Uranium Group Ores is not covered)
130 Mining of Manganese ore
131 Chromite
132 Bauxite
134 Copper Ore
135 Mining of Lead and Zinc Ores.
A-3 15 MINING OF NON-METALLIC MINERALS NOT ELSEWHERE
CLASSIFIED(n.e.c)
150 Mining and quarrying of rock aggregates, sand and clays.
151 Mining/quarrying of minerals for construction other than rock
aggregates, sand and clays.
152 Mining of fertilizers and chemical minerals.
153 Mining of ceramic, refractory and glass minerals.
154 Salt mining and quarrying including crushing, screening and evaporating
in pans.
155 Mining of mica.
159 Mining of other non-metallic minerals.
CHAPTER - I 163
ANNEXURE-III
(Contd..)
PART 'B'
FOR FOREIGN EQUITY UPTO 51%
B-1 00 AGRICULTURAL PRODUCTION

009 Agricultural Production n.e.c.
009.9 Certified high yielding hybrid seeds and synthetic seeds.
B-2 01 PLANTATIONS
019 Plantations n.e.c.
019.9 Certified high yielding plantations developed through plant tissue culture.
B-3 20/21 MANUFACTURE OF FOOD PRODUCTS
200 Preparation and preservation of meat.
200.5 Preservation of meat except by canning.
200.6 Processing and canning of meat.
201 Manufacture of dairy products.
201.1 Manufacture of milk powder, ice-cream powder and condensed milk
except baby milk foods.
201.2 Manufacture of baby milk foods.
201.3 Manufacture of butter, cream, ghee, cheese and khoya, etc.
201.4 Manufacture of Pasteurised milk whether or not in bottles/ polythene
packs etc.(Plain or flavored).
201.9 Manufacture of other diary products n.e.c.
202 Canning and preservation of fruits and vegetables.
202.1 Sun-drying of fruits and vegetables.
202.2 Artificial dehydration of fruits and vegetables.
202.3 Radiation preservation of fruits and vegetables.
202.4 Manufacture of fruit/vegetable juices and their concentrates, squashes
and powders.
202.5 Manufacture of sauces, jams, jellies and marmalades etc.
202.7 Canning of fruits and vegetables.
202.9 Fruit and vegetable preservation n.e.c.
203 Processing, canning and preserving of fish, crustacean and similar
foods.
204 Grain milling

204.1 Flour milling by power machine.
204.9 Other grain milling and processing activities n.e.c.
208 Production of common salt.
209 Manufacture of cocoa products and sugar confectionery (including
sweet meats).
209.1 Manufacture of cocoa products.
218 Manufacture of starch and its derivatives.
219 Manufacture of food products n.e.c.
219.9 Soya texture proteins, soya protein isolates, soya protein concentrates,
other specified products of soya bean, winterised and deodorised refined
soyabean oil.
B-4 23 MANUFACTURE OF COTTON TEXTILES
235 Cotton spinning integrated mills.
B-5 24 MANUFACTURE OF WOOL, SILK & MANMADE FIBRE
TEXTILES
242 Wool Spinning, weaving & processing in integrated mills.
245 Spinning, weaving and processing of silk (textiles) in integrated mills.
247 Spinning, weaving and processing of man-made textiles fibres in
integrated mills.
247.1 Spinning of staple fibres in mills.
247.2 Spinning of Staple fibres and weaving of artitificial/synthetic textile
fabrics in mills.
247.3 Weaving and processing(bleaching, dyening and printing) of artificial/
synthetic textile fabrics in mills.
247.4 Composite artificial textile fibre mills (spinning, weaving and processing)
B-6 26 MANUFACTURE OF TEXTILE PRODUCTS
268 Manufacture of water-proof textile fabrics.
B-7 28 MANUFACTURE OF PAPER AND PAPER PRODUCTS AND
PRINTING PUBLISHING AND ALLIED INDUSTRIES.
280 Manufacture of pulp, paper and paper board including manufacture of
newsprint.
B-8 30 MANUFACTURE OF BASIC CHEMICALS & CHEMICAL
PRODUCTS(EXCEPT PRODUCTS OF PETROLEUM & COAL)
300 Manufacture of industrial organics and inorganic chemicals
CHAPTER - I 165

301 Manufacture of fertilizers and pesticides.

302 Manufacture of plastics in primary forms, manufacture of synthetic
rubber.
303 Manufacture of paints, varnishes and related products, artists' colours
and ink.
304 Manuacture of drugs, medicines and allied products.
306 Manufacture of man-made fibres.
309 Manufacture of chemical products n.e.c.
B-9 31 MANUFACTURE OF RUBBER, PLASTIC, PETRO. LEUM AND
COAL PRODUCTS
310 Tyre and Tube Industries
312 Manufacture of rubber products n.e.c.
313 Manufacture of plastic products n.e.c.
318 Manufacture of coke oven products.
319 Manufacture of other coal products and coal-tar products n.e.c.
B-10 32 MANUFACTURE OF NON-METALLIC MINERAL PRODUCTS
320.7 Manufacture of non-refractory ceramic pipes, conduits, guttering and
pipe fittings.
320.8 Manufacture of non-refractory flooring blocks, support or filler tiles
and roofing tiles.
321 Manufacture of glass and glass products
321.1 Manufacture of glass in primary or semi-manufactured forms(such
as sheet and plate glass) including mirror sheets.
321.3 Manufacture of glass fibre(including glass wool) and product
therefrom.
321.9 Manufacture of glass shells for television picture tube.
323 Manufacture of non-structural ceramic ware.
323.3 Manufacture of ceramic insulators and insulating fittings for electrical
machines, appliances and equipment.
324 Manufacture of cement, lime and plaster
324.2 Manufacture of portland cement, aluminuous cement, slag cement
and similar hydraulic cements, except in the form of clinkers.
329 Manufacture of miscellaneous non-metallic mineral products n.e.c.

329.3 Manufacture of hume pipes and other pre-fabricated structural
components of cement.
329.4 Manufacture of gypsum board.
329.7 Midget carbon electrodes, graphite electrodes and anodes and
impervious graphite blocks and sheets.
329.9 Manufacture of industrial synthetic diamonds.
B-11 34 MANUFACTURE OF METAL PRODUCTS AND PARTS, EXCEPT
MACHINERY AND EQUIPMENT.
341 Manufacture of fabricated metal products.
341.1 Manufacture of railway and ship containers used in container traffic.
341.2 Manufacture of gas-cylinders(industrial or house-hold)
341.3 Manufacture of tanks, reservoirs and containers of metals n.e.c.
341.4 Manufacture of reinforced safes, vaults, strongroom doors and gates
and the likes (manufacture of almirahs and filing Cabinets etc. is classified
in Group 32)
341.5 Manufacture of steel trunks.
341.6 Manufacture of sanitary and plumbing fixtures and fittings of metals.
341.9 Manufacture of other fabricated metal products n.e.c.
344 Forgings, pressings, stampings and roll-forming of metal, powder
metallurgy.
349 Manufacture of metal products(except machinery and equipment) n.e.c.
349.9 Iron and steel pipes/tubes and fittings, welding electrodes other than
those for welding mild steel.
B-12 35/36 MANUFACTURE OF MACHINERY AND EQUIPMENT OTHER
THAN TRANSPORT EQUIPMENT
350 Manufacture of agricultural machinery and equipment and parts thereof.
351 Manufacture of machinery and equipment used by construction and
mining industries.
352 Manufacture of prime movers, boilers.
353 Manufacture of industrial machinery for food and textile industries
(including bottling and filling machinery).
354 Manufacture of industrial machinery for other than food and textile
industries.
CHAPTER - I 167

355 Manufacture of refrigerators, air-conditioners and fire-fighting
equipment and their and accessories.
356 Manufacture of general purpose non-electrical machinery equipment,
their components and accessories, n.e.c.
357 Manufacture of machine tools, their parts and accessories including
toolings and production aids.
358 Manufacture of office, computing and accounting machinery and parts.
359 Manufacture of special purpose machinery/equipment; their
components and accessories n.e.c.
359.1 Manufacture of sewing and knitting machines.
359.2 Manufacture of weighing machinery.
359.3 Manufacture of washing and laundering machine (including centrifugal
clothes driers).
359.5 Manufacture of filtering and purifying machinery for liquids and gases.
359.6 Manufacture of distilling and rectifying plants (including heat
exchangers).
359.8 Manufacture of parts and accessories n.e.c.
359.9 Manufacture of other special purpose non-electrical machinery/
equipment n.e.c.
360 Manufacture of electrical industrial machinery apparatus and parts
thereof.
361 Manufacture of insulated wires and cables, including manufacture of
optical fibre cables.
362 Manufacture of accumulators primary cells and primary battries.
363 Manufacture of electric lamps.
363.2 Manufacture of ultra-violet or infra-red lamps.
363.3 Manufacture of discharge lamps, florescent, hot-cathode or other
discharge lamps.
363.4 Manufacture of arc lamps.
363.5 Manufacture of flash bulbs used in photography.
368 Manufacture of electronic valves and tubes and other electronic
components n.e.c.
369 Manufacture of radiographic X-ray apparatus, X-ray tubes and parts
and manufacture of electrical equipment n.e.c.

B-13 37 MANUFACTURE OF TRANSPORT EQUIPMENT AND PARTS.
370 Ship and boat building.
370.1 Making of ships and other vessels drawn by power upto 10,000 DWT.
370.8 Manufacture of parts and accessories n.e.c. for ships and boats.
371 Manufacture of industrial locomotives and parts.
371.1 Manufacture of industrial diesel locomotives.
371.8 Manufacture of parts and accessories n.e.c. for locomotives.
372 Manufacture of railway or tramway wagons and coaches and other
railroad equipment n.e.c.
372.2 Manufacture of railway or tramway passenger coaches.
372.3 Manufacture of railway or tramway rolling stock, not selfpropelled,
other than passenger coaches.
372.4 Manufacture of railway or tramway fixtures and fittings.
372.5 Manufacture of mechanical and electro-mechanical signalling, safety
or traffic control equipment for railways, tramways, etc.
372.8 Manufacture of parts of railway rolling stock.
373 Manufacture of heavy motor vehicles, coach work.
374 Manufacture of motor cars and other more vehicles principally designed
for the transport of less than 10 persons.
374.2 Manufacture of jeeps and station wagons.
374.8 Manufacture of internal combustion piston engines and other parts
and accessories n.e.c. for motor vehicles classified in this group
excluding for 374.1.
375 Manufacture of motor-cycles and scooters and parts (including three
wheelers).
375.1 Manufacture of motor-cycles.
375.2 Manufacture of scooters and scooterttes.
375.3 Manufacture of three-wheelers.
375.8 Manufacture of internal combustion piston engines and other parts
and accessories n.e.c. for motor cycles, scooters and three-wheelers.
B-14 69 RESTAURANTS AND HOTELS
691 Hotels, rooming houses, camps and other lodging places.
B-15 70 LAND TRANSPORT (SUPPORT SERVICES)
708 Supporting services to land transport, like operation of highway bridges,
roll roads, vehicular tunnels.
CHAPTER - I 169

B16 71 WATER TRANSPORT (SUPPORT SERVICES).
712 Support services to water-transport like operation and maintenance of
peirs, loading and discharging of vessels.
B-17 73 SERVICES INCIDENTAL TO TRANSPORT N.E.C.
730 Cargo handling incidental to land transport.
731 Cargo handling incidental to water transport.
732 Cargo handling incidental to air transport.
733 Renting and leasing (except financial leasing) of motor vehicles, without
operator, for passenger transport.
734 Renting and leasing (except financial leasing) of motor vehicles, without
operator, for freight transport.
739 Renting and leasing of refrigerated/cold transport.
B-18 85 RENTING AND LEASING N.E.C.
850 Renting of transport equipment without operator.
850.9 Renting of other transport equipment n.e.c.
852 Renting of office accounting and computing machinery and equipment,
without operator.
853 Renting of other industrial machinery and equipment.
B-19 89 BUSINESS SERVICES N.E.C.
892 Data processing, software development and computer consultancy
services.
892.2 Software supply services.
893 Business and management consultancy activities.
893.2 Market Research Services.
895 Technical testing and analysis services.
899 Research and Development Services (excluding basic research and
setting up of R & D/academic institutions which would award degrees/
diplomas/certificates).
B-20 93 HEALTH AND MEDICAL SERVICES.
B-21 99 SERVICES NOT ELSEWHERE CLASSIFIED.
990 Tourism related industry.
ANNEXURE-III
(Contd.)
PART 'C'
LIST OF INDUSTRIES/ITEMS FOR
AUTOMATIC APPROVAL FOR FOREIGN EQUITY UPTO 74%

C-l 19 MINING SERVICES
190 Oil and Gas field services, except exploration and production services.
191 Services incidental to mining viz. Drilling, shafting, reclamation of mines,
surveys/mapping-excluding services related to gold, silver and precious/
semi-precious stones.
C-2 33 BASIC METALS AND ALLOYS INDUSTRIES
330 Manufacture of iron ore pellets, pig iron, sponge iron and steel in
primary/semi-finished/f imshed forms.
331 Manufacture of semi-finished iron and steel products in rerolling mills,
cold-rolling mills and wire drawing mills.
332 Manufacture of ferro-alloys
333 Copper manufacturing.
334 Brass manufacturing.
335 Aluminium manufacturing.
336 Zinc manufacturing.
337 Casting of metal.
339 Other non-ferrous metal industries, excluding Gold, Silver and Platinum.
C-3 38 OTHER MANUFACTURING INDUSTRIES.
380 Manufacture of medical, surgical, scientific and measuring equipment
except optical equipment.
380.1 Manufacture of medical/surgical equipment and orthopaedic appliances
(manufacture of apparatus based on the use of X-Ray or other radiators
is classified in Class 369.1).
380.2 Manufacture of industrial process control equipment (this class includes
manufacture of apparatus used for continuous measurement and control
or variable such as temperature, pressure, viscosity etc. of materials
and products as they are being manufactured or otherwise processed.)
CHAPTER - I 171

380.5 Manufarture of sensitive balance and mathematical calculating

instruments.
380.6 Manufacture of laboratory and scientific instruments n.e.c. (including
manufacture of non-optical microscopes, diffraction equipments;
apparatus for measuring or checking electrical quantities, e.g.
oscilloscopes, spectrum analysers, volt meters, with or without
recording devices; apparatus for measuring non-electrical quantities
e.g. radiation detectors, and counters, cross-talk meters and other
instruments specially designed for telecommunications; apparatus for
testing the physical properties of materials, e.g. apparatus for testing
hardness and other properties of metals, for testing the ear and tear
and other properties of textiles and for testing the physical properties
of paper, linoleum, plastic, rubber, wood concrete and of forth;
apparatus for carrying out physical or chemical analysis, e.g.
polarimeters, refractormers, calorimeters, Orsob's apparatus, Ph-
meters, viscometers, surface tension instruments and so forth and
instruments and apparatus for measuring or checking the flow, level,
pressure or other variables of liquids or gases, e.g. flow meter, level
gauges, manometers, heat-meters, and so forth, except industrial
process control equipment).
380.8 Manufacture of parts and accessories n.e.c. for instruments and
apparatus included in this group.
380.9 Manufacture of other medical surgical, scientific and measuring
equipment n.e.c. (Includes manufacture of hydrometers, thermometers,
pedometer, tachometers, balancing machines, test benches, comparators
(include optical comparators and other optical type measuring and
checking appliances and instruinents); instruments for checking watches
or watch parts and so forth).
381 Manufacture of' photographic. cinematographic and optical goods and
equipment (excluding photochemicals, sensitised paper and film).
388 Manufacture of items based on solar energy like solar cells, cookers,
air and water heating systems and other related items.
C-4 40 ELECTRIC GENERATION AND TRANSMISSION
400 Generation and transmission of electric energy.
400.1 Generation and transmission of electric energy produced in hydro-
electric power plants.
400.2 Generation and transmission of electric energy produced in coal/lignite
based thermal power plants.
400.3 Generation and transmission of electric energy produced in oil based

400.4 Generation and transmission of electric energy produced in gas based
C-5 43 NONCONVENTIONAL ENERGY GENERATION AND
DISTRIBUTION.
C-6 50 CONSTRUCTION.
501 Construction & maintenance of roads, railbeds, bridges, tunnels,
pipelines, ropeways, ports, harbors and runways.
503 Construction & maintenance of waterways and water reservoirs.
504 Construction and maintenance of hydroelectric projects.
505 Construction and maintenance of power plants.
506 Construction, and maintenance of industrial plants.
C-7 70 LAND TRANSPORT
707 Pipeline transport excluding Crude Oil, petroleum products and natural
gas pipelines.
C-8 71 WATER TRANSPORT
710 Ocean and water transport
711 Inland water transport.
C-9 74 STORAGE AND WAREHOUSING SERVICES.
741 Warehousing of agricultural products with refrigeration (cold storages).
CHAPTER - I 173
EXHIBIT NO.72
DELEGATION OF POWERS FOR EOU & EPZ UNITS
Subject: Delegation of powers for Export Oriented case of EOUs and EPZ units, by three years,
Units and EPZ Units. beyond the initial validity period of the Letter
Government had delegated certain powers to of Intent/Letter of Permission/Letter of
the Development Commissioners of Export Approval (except in case where there is a
Processing Zones in respect of Export Oriented Units restriction on initial period of approval, like
(EOUs) and the EPZ units, vide Press Note setting up oil refinery projects).
No.4(1995 Series) dated 19.4.1995. These powers
(ii) Disposal of Obsolete Capital Goods
inter-alia cover extension in the validity period of
Letters of Intent/Letter of Permission/Letters of To allow disposal of capital goods, in DTA, on
Approval by a period of one year and also to permit payment of applicable duties, however, disposal
disposal of obsolete capital goods (more than 5 years of capital goods (used for less than 5 years), in
old), in DTA, on payment of applicable duties. DTA, will be allowed upto a maximum limit of
2. In line with the economic reforms, Rs.lO lakh in each financial year for an EOU/
Government have decided to delegate further powers EPZ unit.
to the Development Commissioners of Export While permitting disposal of capital goods in
Processing Zones as follows:-
DTA, the Development Commissioners will give due
(i) Extension of the validity period of LOI/ consideration to the fact whether or not there will
LOP/LOA be replacements for obsolete machinery and that the
To extend the validity oeriod of Letter of Intent/ Export Obligation will be achieved after disposal of
Letter of Permission/Letter of Approval, in the machinery.
F. No.10(53)/91-IP New Delhi, the 10th November, 1997
Sd/-
(Dhiraj Mathur)
Director

New Delhi.
EXHIBIT NO.73
SETTING UP OF 100% EOUs FOR ACQUCULTURE & FISH/PRAWN PROCESSING UNITS
Subject: Setting up of 100% EOUs for Aquaculture for 100% Exoort Oriented Units (EOUs) (with or
and Fish/Prawn Processing Units-prior without foreign collaboration) would need to follow
clearance from the Aquaculture Authority, a uniform procedure viz. applications may be
Chennai. submitted to the Secretariat for Industrial Assistance
(SIA) and the Fisheries Department of the concerned
In pursuance of the directions of the Hon'ble State simultaneously. All applicants should also submit
Supreme Court, Government have constituted an a Declaration that their proposed project falls outside
Aquaculture Authority at Chennai. All aquaculture 500 meters of the CRZ Area. The proposals for
projects including fish/prawn processing units (new setting up such 100% EOUs will be considered by
or existing) are now required to necessarily obtain the FIPB/Board of Approvals for 100% EOUs and
clearance from the Aquaculture Authority as per the thereafter by Government, only on receipt of the
prescribed procedure. clearance of the project by the Aquaculture Authority.
2. Keeping in view the aforesaid decision of 3. This is for general information of applicants
Government, it has been decided that applications for such projects.
F. No.10(42)/97-IP New Delhi, the 1st December, 1997
Sd/-
(Dhiraj Mathur)
Director

New Delhi.
CHAPTER - I 175
EXHIBIT NO.74
FILING OF INDUSTRIAL ENTREPRENEURS MEMORANDUM
Subject: Filing of Industrial Entrepreneurs etc. issued by the Central or State Governments from
Memorandum - reg. time to time or any specific directions or Stay Orders
Under the present Industrial Policy, issued by the Court/rompctc'nt authority relevant to
entrepreneurs are required to submit an Industrial such an activity, are also fully complied with, or in
Entrepreneurs Memorandum (IEM) in the prescribed no way contravened, as the case may be.
form with five spare copies alongwith a Demand 3. It is therefore, clarified that it is the
Draft for Rs.l000/- to the Secretariat for Industrial responsibility of the entrepreneur to ensure that the
Assistance (SIA) in the Department of Industrial manufacturing activity, as specified in the lEMs, does
Policy and Promotion, Ministry of Industry. On filing not come into conflict with other legal provisions or
the memorandum, entrepreneurs are given an directions or standing orders. In case of doubt, the
acknowledgement by the Entrepreneurial Assistance entrepreneur may avail of the assistance of the
Unit (EAU) of the SIA, Ministry of Industry.
Secretariat for Industrial Assistance to seek
Requirement of entrepreneurs having to file a
clarifications on whether the industrial activity
memorandum is intended mainly to conduct a limited
contemplated in the IEM for which an
post-facto check to see whether the proposed
acknowledgment was issued by the SIA would be
manufacturing activity requires an industrial licence
repugnant to any statutes/regulations/notifications
or not.
etc. issued by the Central Government or on the
2. Acknowledgement of the IEM which is given details of other legal provisions or directions they
on the spot on prima facie evidence of not attracting have to additionally comply with before such an
the provisions of licensing, cannot, therefore, be activity is taken.
construed as a clearance or approval to carry on an
industrial activity contemplated in the IEM unless 4. All concerned are requested to note these
the provisions of statutes/regulations/notifications clarifications for compliance.
Sd/-
(Ashok Kumar)

New Delhi.
EXHIBIT NO.75
REVISION OF FORM FOR FOREIGN COLLABORATION AND INDUSTRIAL LICENCE-COMPOSITE FORM
Subject: Revision of Form for Foreign prescribe a composite application forms as given in
Collaboration and Industrial Licence - the Annexure to this Press Note.
Composite Form. 2. The EOU form being a part of the EXIM Policy
At present two separate application forms are and Handbook of Procedure will remain separate.
prescribed for obtaining approval for foreign IEM form is being revised separately for
investment and technology agreements and for grant entrepreneurs to file nominations about setting up
of industrial licence. It is considered that a composite their units.
application would be more convenient for the 3. Henceforth, all proposals for foreign
entrepreneurs to apply for obtaining FC approvals/ collaboration and industrial licence will be accepted
grant of IL. Government have, therefore, decided to by the SIA in the composite form.
Sd/-
(Dhiraj Mathur)
Director

New Delhi.
CHAPTER - I 177
FORM - FC/IL
SIA
COMPOSITE FORM FOR FOREIGN COLLABORATION

AND INDUSTRIAL LICENCE
Please fill up the attached supplementary sheets
Part A: For only FC/Part B: For only IL/Both Part A and Part B for FC+IL
GENERAL INFORMATION
1. Type of Application (Please [!] the Appropriate Boxes)
a) Foreign Collaboration(FC)
For Foreign Investment For Foreign Technology Agreements
b) Industrial Licence(IL)
2. (For Office Use Only)

Applicant No.
Application No.
3. Payment Details(For FC Application No Fee is Payable. For Industrial Licences 2500, *is Payable)
Draft No.
Amount(Rs)
Draft Date
Drawn on ____________________ Payable at ________________________________
1. Name and address of the Promoter/Industrial Undertaking (Indian/foreign) in full (BLOCK LETTERS)
for Correspondence:
Name of the Promoter/Indl.
Undertaking
Postal Address
Pin code Telphone

Telex Fax
Cable
E-Mail
II. Registrar of Companies Registration No.
(If Registered)
Note: * Demand Draft should be made in favour of Pay & Accounts Officer, Deptt. of Industrial
Development, to be payable at State Bank of India, Nirman Bhawan, New Delhi.
III. Status of the Promoter/Industrial Undertaking

III(1) Status of the Promoter/Promoter Undertaking
1. Central Government Undertaking 5. Joint Sector Undertaking
2. State Government Undertaking 6. Private Sector Undertaking
3. State Industrial Government Corpn. 7. Individual Promoter
4. Co-operative Undertaking 8. Foreign/NRI/OCB Company
9. Foreign/NRI Individual
III(2) Indicate whether this proposal is for (Please [!] the Appropriate Box)
1. Establishment of New Undertaking/Setting up a New Company
2. Effecting Substantial Expansion
3. Manufacture of New Articles
4. Amendments in existing Foreign Collaboration Approval
5. Inducting Foreign/NRI equity in existing Indian Company
IV(1) Location of the Factory/Proposed Activities

Location & Address
District
State
Pin Code Telephone
Fax
E-Mail
IV(2) Please indicate whether the proposed location is

(Please [!] the Appropriate Box)
a. Within 25 kms from the periphery of a city having population above one million
according to 1991 census
Yes No
b. If Yes, then whether it is located in an Industrial area/Industrial Estate Designated/

set up prior to 25.7.91
Yes No
V(A) EXISTING ACTIVITIES TO THE COMPANY (Here also specify Item codes as
per National Industrial Classification of All Economic Activity, (NIC), 1987.
V(B) PROPOSED ACTIVITIES OF THE COMPANY

(1) Items of manufacture(including By-product/Co-product) proposed to be undertaken
(supplementary sheets may be used if necessary).
CHAPTER - I 179
(a) Item code (NATIONAL CLASSIFICATION OF ALL ECONOMIC ACTIVITY(NIC), 1987)
(b) Item Description
(c) Proposed Annual Capacity

(d) Existing Capacity
(If, applicable)*
(e) Total Capacity after expansion
(f) Unit of capacity
(g) Description of Activities to be undertaken (if no manufacturing is envisaged)
(2) Whether the Item is covered in Schedule I (Reserved for Public Sector), Schedule II (Under
Compulsory Licensing) or Schedule III (Reserved for manufacture in the Small Scale Sector) of the
Notification No.477(E) dated 25th July, 1991
Schedule I Schedule II Schedule III

Yes Yes Yes
No No No
(3) Briefly indicate process involved in manufacture of the item(s)
V(C) Attach list of Industrial Licence/Registration/LOI/IEM acknowledgements already issued in favour of

the applicant so far.
V(D) Whether the Indian Promoter/Company has had a foreign collaboration earlier? If yes, please specify
whether for the same or similar or different products/activity. Please also indicate the Approving
Authority and date & No. of the Approval Letter.
V(E) Whether the foreign/NRI/OCB collaborations with any other Individual/Company in India for the same
or similar or different products/activities? If so, please furnish details.
* Particulars of approval/Industrial Licence under which existing capacity is indicated may be annexed.
VI CAPITAL STRUCTURE
(I) Capital Structure of Existing Indian Company(Amount in Rupees) & proposed capital structure (if
revision sought)
Equity Preference
(a) Authorised
(b) Subscribe
(c) Paid-up
(III) Pattern of share holding in Paid-up Capital (Amount in Rupees)
Existing Proposed
Equity % Equity %
(a) Foreign Holding
Preference Share Percentage
(b) Non resident Indian Individual Holding/OCB holding
Equity % Equity %
(i) Repatriable
Equity % Equity %
(i) Non-Repatriable
Equity % Equity %
(i) Resident Holding
(d) Total II [a+b(i+ii)+c]

Equity
Preference
VII. Proposed Borrowings(in Rupees)
(1) Public Financial Institution

(2) Public Borrowings
(3) Other Sources
(4) ECB
(5) Promoter Contribution
Total Borrowings
CHAPTER - I 181
VIII. Please indicate in brief:

(i) The background of the Indian Promoters/Company including Proprietors/Promotor/Directors(attach
separate sheet, if necessary)
(ii) The background of the Foreign/NRI/OCB Collaborator/Promoter(attach separate sheet, if necessary)
IX. Investment(in Rupees)
Existing Proposed
(A) Land
(B) Building
(C) Plant & Machinery
(i) Indigenous
(ii) Imported
(a) CIF Value
(b) Landed Cost
(iii) Total
[(i)+(ii)(b)]
(D) Working
Capital
(E) Total
Investment
[A+B+C(iii)]
X. Export commitments/obligation which the applicant is prepared to undertake.
Item Code
Year Units(Tonnes/number Quantity %age of FOB Value

/meters/any other) Production in Rupees
(1) (2) (3) (4) (5)

1st
2nd
3rd
4th
5th etc.
Total
Please indicate buy back arrangements, if any

XI. Employment (All Figures in Numbers)

Existing Proposed Total
(if applicable)
(a) Supervisory
(b) Non-Supervisory
XII.Expected date of commencement of commercial production

Date Month Year
CHAPTER - I 183
PART-A
[For Foreign Collaboration]
XIII. Foreign Investment
(a) Foreign Collaborator
Name ___________________________________________________
Address ___________________________________________________
Country ___________________________________________________
(b) Amount of Foreign Equity Investment
Amount in Rupees Percentage of paid-up capital
XIV. Foreign Technology Agreement

(a) Technical Collaborator
Name ___________________________________________________
Address ___________________________________________________
___________________________________________________
Country ___________________________________________________
(b) Royalty on Sales
Sales Percentage of Sales Period Please tick [!]

whichever is applicable
Domestic Inclusive of taxes
Export Net of taxes
(c) Nature and quantum of Lumpsum Payment
Name of Amount of Foreign No. of Instalment Please tick

Foreign exchange required in which Payment whichever is
Currency will be made applicable
Inclusive of taxes
Net of taxes
i) Technical know-how fees
ii) Payment of design/drawing
iii) Payment for engineering Services
iv) Payment for use of patents, brand names trade marks and the like
v) Any other Payments (Please specify the purpose)

XV. (I) Total foreign Exchange inflow during the period of proposed collaboration
a) Equity
b) Foreign Exchange earnings based

on f.o.b. value of export obligation/
commitment
(II) Total foreign Exchange outgo during the period of collaboration
i) Import of machinery & equipment
ii) Import of raw materials & Components
iii) Import of Spare and Consumables
iv) Dividends & Profits(net of taxes)
v) Lumpsum Payment(net of taxes)
vi) Royalty payments(net of taxes)
vii) Design & Drawing Fee
viii) Payment of Foreign Technicians
ix) Payment of training of Indian

Technicians abroad
x) Commission of Export etc.
xi) Amount of interest to be paid on

External commercial borrowing/deferred
Payment credit(Specify details)
xii) Any other payment(Specify details)
Total (i) to (xii)
Net Foreign Exchange Position
XVI. If this application is for extension of collaboration agreement or renewal of the already expired
collaboration agreement
CHAPTER - I 185
(a) Please indicate the period for which the agreement has already run and attach the copy of the previous
approval
No. & date of Date of commencement Date of expiry of
Approval agreement agreement
Date Month Year Date Month Year
Date Month Year
(b) Justification for extension of the collaboration agreement with information about the status of
absorption and development of the technology already achieved
(i) Whether you have set up any R&D Cell to absorb the know-how and the progress achieved in this
regard
Yes No
(ii) If yes, please indicate the number and date of communication under which recognised by Department
of Science & Technology/Department of Scientific and Industrial research
(iii) Expenditure on R&D Facility set up(in Rupees) Amount of Investment in fixed assets Annual
Recurring expenditure
(d) Total payment made so far(Net of taxes)(in Rupees)

a) Lumpsum
b) Royalty
c) Other Payments
XVII. Please indicate
(a) the Regional Office of the RBI to whom a copy of the approval is to be endorsed
_____________________________
_____________________________
(b) the name of the Authorised Dealer of Foreign Exchange concerned through whom the remittance
know-how fees and Royalty will be made
Name: ____________________________________
Address: ____________________________________
DECLARATION
I/We hereby certify that the above statement are true and correct to the best of my knowledge and
belief.
(Signature of Applicant) _____________________________________
(Name in block letters) _____________________________________
(Designation of the signatory) _____________________________________
Place _____________________________________
Date Date Month Year
Part: B
(For IL Application Only)
XVIII. Import Requirements
a. Capital Goods for the Projects
____________________________________________________________________________
(In rupees) (US $ Thousand)
____________________________________________________________________________
Imported
Indigenous
b. Raw Materials(including components, intermediates and packing materials) per annum

____________________________________________________________________________
(In rupees) (US $ Thousand)
____________________________________________________________________________
Imported
Indigenous
ITEM NAME QUANTITY

1.
Unit Value
2.
Unit Value
3.
Unit Value
c. Consumables & Spares for CG for the Project per annum
Year (in rupees) (US $ Thousand)
Imported
Indigenous
CHAPTER - I 187
DECLARATION
I/We hereby certify that the above statements are true and correct to the best of my/our knowledge and belief.
(Signature of Applicant) ___________________________________________________
(Name in Block letters) ___________________________________________________
(Designation of the Signatory) ___________________________________________________
Place ___________________________________________________
Date ___________________________________________________
Note for Guidance of Entrepreneurs submitting applications for grant of Industrial Licence/approval
for Foreign Investment and Technology Agreements.
(This part contains information for the guidance of entrepreneurs and may be
retained by them; it need not accompany the application)
GENERAL
1. Application is to be submitted to Secretariat for Industrial Assistance, Department of Industrial
Policy & Promotion, Ministry of Industry, Udyog Bhawan, New Delhi with 9 copies of both the
application and forwarding letter.
2. Applicants are required to take care in filling up their application properly and completely.
3. The application form should be duly signed and the designation/authority of the person signing the
application should be clearly shown.
4. Only the relevant part of the application form should be used. General information is to be furnished by
all applicants. Part 'A' is to be filled by entrepreneurs/investors applying for grant of approval for
foreign collaboration. Part 'B' is to be used for obtaining Letter of Intent/Industrial Licence. Part 'A' and
Part 'B' are to be filled in case of composite proposals involving foreign collaboration and industrial
licensing.
5. Application involving grant of Industrial Licence shall be accompanied by a crossed Demand Draft for
Rs.2500/- drawn on the State Bank of India, Nirman Bhawan, New Delhi in favour of the "Pay &
Accounts Officer, Department of Industrial Development, Ministry of Industry, New Delhi".
I. FOREIGN INVESTMENT
(i) Approval will be given by the Reserve Bank of India for direct foreign investment upto 50/51/74 per
cent foreign equity in high priority industries (Annex III, Annex III Part'A', Part 'B' and Part 'C'). There
shall be no bottlenecks of any kind in this process.
(ii) The import of components, raw materials and intermediate gods, and payment of know-how fees and
royalties will be governed by the general policy applicable to other domestic units.
(iii) Other foreign equity proposals, including proposals involving 50/51/74 per cent foreign equity
which do not meet the criteria under (I) above, will continue to need prior clearance. Foreign equity
proposals need not necessarily be accompanied by foreign technology agreements.
(iv) To provide access to international markets, majority foreign equity holding upto 51 per cent equity will
be allowed for trading companies primarily engaged in export activities. While the thrust would be on
export activities, such trading houses shall be at par with domestic trading and export house in accordance
with the Import-Export Policy.
(v) For increase/induction of foreign equity in the existing company, the request should be supported by a
Board Resolution of the Indian Company.
II) FOREIGN TECHNOLOGY AGREEMENTS
(I) Automatic permission will be given by the Regional Offices of the Reserve Bank of India for foreign
technology agreements in high priority industries (Annex III, Annex III Part 'A', Part 'B' and Part 'C')
upto a lumpsum payment of US $ 2 million, 5% royalty for domestic sales and 8% for exports, subject
to total payment of 8% of sales over a 10 year period from date of agreement or 7 years from
commencement of production. The prescribed royalty rates are net of taxes and will be calculated
according to standard procedures.
(ii) In respect of industries other than those in Annex III, Annex III Part 'A', Part 'B' and Part 'C', automatic
permission will be given subject to the same guidelines as above.
CHAPTER - I 189
(iii) All other proposals will need specific approvals under the general procedures in force.
(iv) No permission will be necessary for hiring of foreign tecimicians, foreign testing of indigenously
developed technologies. Payment may be made from blanket permits or in free foreign exchange according
to RBI guidance.
III. Standard Conditions Attached to Approvals for Foreign Collaborations:-
1. The total non-resident shareholdings in the Indian company should not exceed the amount as well as
the percentage specified in the approval letter. For any proposed increase in the amount, as also the
percentage of the Non-Resident shareholding, prior approval of the Government shall be obtained.
2(a) The royalty will be calculated on the basis of the net ex-factory sale price of the product exclusive of
excise duties minus the cost of the standard bought-out components and landed cost of imported
components irrespective of the source of procurement, including oceanfreight, insurance, custom
duties etc The payment of royalty will be restricted to the licensed capacity plus 25% in excess thereof
for such items requiring industrial licensed. In case of production in excess of the quantum, prior
approval of Government will have to be obtained regarding the terms of payment of royalty in respect
of such excess production.
2(b) The royalty would not be payable beyond the period of the agreement, if the orders had not been
executed during the period of agreement. However, where the order has been booked during the period
of agreement, but executed after the period of agreement, royalty would be payable only after the
Chartered Accountant Certifies that the orders in fact have been firmly booked and execution began
during the period of agreement and the technical assistance was available on a continuing basis even
after the period of agreement.
3. The lumpsum shall; be paid in three instalments detailed below unless otherwise stipulated in the approval
letter - First l/3rd after the agreement is filed with Reserve Bank of India, Authorised Foreign Exchange
Dealer; Second l/3rd on delivery of technical documentation; Third and final l/3rd on commencement
of commercial production of four years after the agreement is filed with RBI/Authorised Foreign
Exchange Dealer, whichever is earlier. The lumpsum can be paid in more than three instalments subject
to completion of the activities as specified above.
4. In case the proposed activity is not exempted from the provision of Industrial (Development & Regulation)
Act, 1951 and the Foreign Exchange Regulation Act, 1973 it will be your responsibility to obtain such
clearances as may be required under the said Acts.
5. The location of the industrial projects, will be subject to Central or State Environmental laws or regulations
including local zoning and land use laws and regulations.
6. Adequate steps shall be taken on the satisfaction of the Government to prevent air, water and soil
pollution. Such anti-pollution measures to be installed should conform to the effluent and emission
standards prescribed by the State Government in which the factory or the industrial undertaking is
located.
7. Items reserved for the Small Scale Sector shall not be manufactured without prior approval of the
Government as per the prescribed policy and procedure.
8. Since the maximum equity participation allowed for in Small Scale Units is 24%, their company's
proposal for having, foreign equity of more than 24% would be subject to the condition that the
company would get itself de-registered as a small scale unit and obtain industrial licence or would file
Industrial Entrepreneur Memorandum with SIA as per the prescribed policy and procedure.
9. For undertaking export obligation, if any, specified in the approval letter, the requisite guarantee, i.e.,
legal undertaking/bank guarantee, as may be required should be furnished according to the detailed
instructions issued by the Director General of Foreign Trade (EO Cell), Ministry of Commerce, and the
Administrative Ministry, who may be contacted in the matter.
10. Import of capital equipments, components and raw materials will be allowed as per the import policy
prevailing from time to time.
11. The approval is valid for a period of two years from the date of issue. Within this period, the collaboration
agreement is requested to be file with the Reserve Bank of India/Authorised Foreign Exchange Dealer.
12. The FC agreement shall be subject to Indian Laws.
13. Foreign Investment Remittance Certificate (FIRC) is required to be sent to the Regional Office, Reserve
Bank of India, immediately on receipt of foreign remittance.
14. All remittances to the foreign collaborator shall be made as per the exchange rates prevailing on the day
of remittance.
15. A copy of the collaboration agreement, signed by both parties may be furnished to the following
authorities:-
(A) Administrative Ministry/Department as mentioned in the Approval to be issued by SIA.
(B) Secretariat for Industrial Assistance (Foreign Collaboration II Section) Department of Industrial Policy
& Promotion, Udyog Bhavan, New Delhi - 110 011.
(C) Department of Scientific and Industrial Research, Technology Bhavan, New Mehrauli Road, New
Delhi.
16. * The outflow of foreign exchange on account of dividend payment will be balanced by export earnings
on the following basis:
a) The balancing of the dividends would be over a period of 7 years from commencement of production.
Balancing will not be required beyond this period.
b) Remittance of dividends should be covered by earnings of the company from export of items covered
by the foreign collaboration agreements. You are also permitted to cover remittance of dividends from
earning through export of items not covered by the agreement provided they recovered in the list of
Industries in Annexure III of Statement of Industrial Policy of 24th July 1991. The amount of dividend
payments may be covered by export earnings of such items covered by export earnings of such items
covered in years prior to the payment of dividends or in the year of payment of dividends.
(*Wherever applicable)
IV. Hiring of Foreign Technicians
No permission is necessary for hiring of foreign technicians and no application need be made to
Government for this purpose irrespective of whether the hiring of foreign technicians is under an
approved collaboration agreement or not. As regards release of foreign exchange either against blanket
permits or in free foreign exchange, the Reserve Bank of lndia/ Authorised Dealers may be approached,
as per RBI guidelines.
V. Deputation of Indian Personnel for Raining Abroad.
For deputing Indian personnel for training and other purposes abroad, the entrepreneurs may approach
only the RBI/Authorised Dealers an per RBI guidelines.
VI. Foreign. Testing of Indigenous Raw Materials and Products and Indigenously Development Technology.
Entrepreneurs may approach RBI/Authorised Dealers for authorising payments either against blanket
permits or in free foreign exchange, as per RBI guidelines.

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CHAPTER - I 125

F. No.10(20)/96-LP New Delhi, the 10th January, 1996

F. No.10(31)/97-LP New Delhi, the 17th January, 1997

Principal Information Officer

SI. NIC CODE Description

SI. NIC CODE Description

SI. NIC CODE Description

SI. NIC CODE Description

SI. NIC CODE Description

SI. NIC CODE Description

SI. NIC CODE Description

SI. NIC CODE Description

380.8 Manufacture of parts and accessories n.e.c. for instruments and

SI. NIC CODE Description

F. No.10(32)/97-IP New Delhi, the 17th January, 1997

Press Information Officer

Guidelines for the consideration of Foreign Direct Investment (FBI)

7. While considering proposals the following may be prioritised

Construction of bypasses, bridges and widening of high

12. Mining I) Foreign equity participation of upto 50% in the

a) The size of the project

The Government have announced a set of 3) Minimum Capitalization norms :

F. No.10(32)/97-IP New Delhi, the 30th April, 1997

ii) Attestation of list of imported CG: To attest v) Extension of validity of Letters of

F. No.10(58)/92-IP New Delhi, the 21st May, 1997

1. Andaman & Nicobar 9. Goa

i. Director, Software Technology Park, 15. Kerala

17. Maharashtra Multi Storied Complex, Block III,

SI. Designation and Area/

SI. Designation and Area/

7. Director, Kerala & Lakshadweep

F. No.10(15)/92-IP New Delhi, the 28th May, 1997

F. No.10(18)/96-IP New Delhi, the 1st July, 1997

F. No.10(53)/92-IP New Delhi, the 7th July, 1997

Subject: Electronics Hardware Technology Park b. he is a subscriber to the Articles and

F. No.10(58)/92-IP New Delhi, the 7th July, 1997

F. No.10(18)/97-IP New Delhi, the 14th July, 1997

F. No.10(3)/97-IP New Delhi, the 17th July, 1997

F. No.8(1)/97-FC(1) New Delhi, the 3rd September, 1997

Press Information Officer

F. No.10(32)/97-IP New Delhi, the 5th September, 1997

Press Information Officer

F. No.10(31)/97-IP New Delhi, the 8th October, 1997

SI. NIC CODE Description

B-1 00 AGRICULTURAL PRODUCTION

SI. NIC CODE Description

SI. NIC CODE Description

301 Manufacture of fertilizers and pesticides.

SI. NIC CODE Description

SI. NIC CODE Description

SI. NIC CODE Description

SI. NIC CODE Description

SI. NIC CODE Description

SI. NIC CODE Description

380.5 Manufarture of sensitive balance and mathematical calculating

SI. NIC CODE Description

F. No.10(53)/91-IP New Delhi, the 10th November, 1997

Press Information Officer

F. No.10(42)/97-IP New Delhi, the 1st December, 1997

Press Information Officer

F. No.10(43)/97-IP New Delhi, the 28th November, 1997

Press Information Officer

F. No.10(41)/97-IP New Delhi, the 26th November, 1997