But no LLPs in plantation, print media or real estate.
The government on Wednesday allowed foreign direct investment (FDI) in Limited Liability Partnership companies but only in sectors like mining, power, roads and highways, manufacturing activities, drugs and pharmaceuticals.
These are the sectors where 100 per cent FDI is allowed for companies through automatic route. But LLPs engaged in agricultural and plantation activities, print media or real estate business are not allowed to have FDI, the Cabinet Committee on Economic Affairs decided on Wednesday.
LLP is a new business structure that has hybrid features of a partnership firm and a corporate body — a company’s limited liability and the flexibility of a partnership firm.
The LLP structure was introduced from April 2009. As on May 2 this year, as many as 4,679 LLPs were registered with the Ministry of Corporate Affairs. The Cabinet further decided that foreign institutional investors and foreign venture capital investors would not be permitted to invest in LLPs.
LLPs will also not be permitted to avail of external commercial borrowings. Besides, LLPs with FDI will not be eligible to make any downstream investments. Also, the Cabinet decided to allow claimants to seek assets of a deceased up to Rs 10 lakh against the present ceiling of Rs 2 lakh.
For this purpose, the Cabinet approved amendment to the Administrators-General Act. The Administrator General appointed by states certifies claims to properties of individuals who die without a legal heir. The Cabinet Committee on Infrastructure approved a Rs 1,060-crore project for building a dry bulk terminal at the Kandla Port Trust on build, operate and transfer basis.
CABINET OKAYS FDI INFUSION INTO GMR AIRPORTS
The Cabinet Committee on Economic Affairs on Wednesday approved a proposal of the GMR Airports Holding to receive additional foreign direct investment (FDI) worth $200 million (over Rs 900 crore).
This will be in addition to the earlier approval to induct foreign investment of $200 million. The two proposals would result in FDI inflows of Rs 1,920 crore, an official release said. The FDI will be received from Standard Chartered Private Equity III (Mauritius, NYLIM Jacob Ballas India Fund III, LLC, Mauritius and JM Financial-Old Lane India Corporate Opportunities Fund I Ltd, Mauritius. “The foreign investment will be received by way of subscription to compulsorily convertible preference shares of face value of Rs 1,000 each pursuant to the Foreign Investment Promotion Board recommendation in its meeting held on February 15, 2011,” a government release said.
The government had earlier approved FDI worth $200 million from Macquarie SBI Infrastructure Investments-l Limited, Mauritius.