The major changes
introduced by NIP are as follow: |
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(i) NIP brings
about a streamlining of procedures, deregulation,
de-licensing, a vastly expanded role for the private
sector and an open policy towards foreign investment
and technology. |
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Foreign investors are allowed to hold more than 50%
equity ownership in most of the sectors, and 100%
percent equity ownership in some sectors. |
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Foreign Institutional Investors ("FII's) from
reputable institutions (like pension funds, mutual
funds) may participate in the Indian capital
markets. |
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Joint ventures with trading companies and imports of
secondhand plants and machinery are allowed. |
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Monopoly and restrictive trade practice restraints
(i.e., antitrust laws) have been eased. |
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Customs duties have been slashed considerably;
duty-free imports are allowed in some cases. |
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The rupee is completely convertible; 100% of foreign
exchange earnings can be converted at free market
rates. |
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Export policies have been liberalized. |
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The Foreign Exchange Regulation Act has been amended
to encourage foreign investments in India. |
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A tax holiday is available for a period of 5
continuous years in the first 8 years of
establishing exporting units. |
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A tax holiday for up to 5 to 8 years is available
and 100% equity participation is allowed for the
power projects in India. |
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Concessions in tax regime are available for foreign
investors in high-tech areas |