Legal Advice on the Investment Routes for Foreign Direct Investments (FDI) in India-Clothing & Apparel Industry: Best FDI Attorney in India

FDI in India | Foreign Direct Investments in India | Corporate Lawyer in Delhi NCR | Corporate Lawyer in Delhi | Corporate Lawyer in Noida | Corporate Lawyer in Gurugram | Corporate Attorney in Delhi NCR | Corporate Attorney in Delhi | Corporate Attorney in Noida | Corporate Attorney in Gurugram | FDI Attorney Legal Advice in Delhi NCR | FDI Attorney Legal Advice in Delhi | FDI Attorney Legal Advice in Noida | FDI Attorney Legal Advice in Gurugram | FDI Attorney in India | FDI in India | Foreign Direct Investments in India | FDI Legal Services in Delhi | FDI Legal Services in Noida | FDI Legal Services in Gurugram | FDI Legal Services in India | India Business Entry | Setup Business in India | Setting up Business in India |

“Foreign Direct Investment in India or FDI in India can be made in India only through two routes i.e. the Automatic Route and the Government Route. The entire FDI process is a bit complicated and involves a proper legal advice from an FDI Attorney in India. This further involve dealing with the business laws of India and the corporate laws of India. Further, FDI in clothing and apparel industry also has seen a lot of Government incentives and schemes which can be availed by the foreign investor while making the investments in India.”

Introduction
Non-Resident Indians (NRIs) can invest in shares, statutorily and completely convertible debentures, or compulsorily and entirely convertible preference shares of an Indian firm through two methods under the FDI Scheme. As per the Automatic Route, a foreign investor or an Indian firm does not need the Reserve Bank or the Government of India’s permission to invest. The Government Route need prior consent from the Indian government. The Foreign Investment Promotion Board considers proposals for foreign investment through the government channel.

Any foreign investor interested in investing in India can do so by forming a corporation, or forming a joint venture with an Indian partner or even a non-corporate entity. Under the automatic route, 100 percent FDI is authorised in the textile industry, according to the unified FDI policy of the Department of Industrial Policy and Promotion, Ministry of Commerce and Industry, Government of India. The regulation is quite flexible and in accordance with international standards. International investors can invest through the automated method without the need for prior authorization from the central government or the RBI. Simple RBI reporting is required upon acceptance of submission of the application money and issuance of shares to NRI investors.

It is maintained liberal because the Indian manufacturing Industry, which is competitive in the market, does not require any security from international enterprises. The goal is to create jobs and facilitate the transfer of technical and market knowledge. International investors have no objections to India’s FDI policy for the industry in the absence of any restrictions. However, as discussed later, they are concerned about unnecessary delays and other aspects of the business environment.

Entry of Foreign Companies in Indian Market
A Foreign company can start their business in India through mainly two ways which are as follows:
Registration of Liaison Office, Project Office, or Branch Office-
Branch Office: For foreign enterprises intending to maintain a short-term presence in India, this is an appropriate business strategy. The branch office functions as an extension of the parent company’s operations, carrying on the similar form of business and activities. Companies that want to open a branch office in India must be a body corporate established outside of India, the name of the Indian branch office should be the identical to the parent company.

Liaison Office: A international company or firm can open a representative office in India by first receiving approval from the RBI and then registering with the ROC and the State Police. We have solid ties in India that allow us to provide seamless services. A liaison office can be established to represent parent companies in India, encourage export and import, encourage to bring about any technical or any financial cooperation between the companies and Indian enterprises, and act as a communication route between parent and Indian companies.

Project Office: A Project Office (PO) is a commercial entity set up to serve the objectives of a foreign corporation carrying out a project in India. Such offices are barred from engaging in or carrying out any activities other than those related to the project completion for which they were created.

Procedure for Incorporating a Private Limited Company in India
For foreign citizens and international corporations, forming a private limited company is one of the simplest and fastest way to enter India. The automatic method allows FDI of up to 100 percent in a private limited business or limited company with no need for Central Government approval. As a result, forming a private limited company as an entirely subsidiary or joint venture of a international firm is the inexpensive, easiest, and quickest way for international corporations and foreign persons to enter India.

Biggest Challenges faced by Foreign Corporations while setting-up their Business in India
Maximum 51 percent stake in multi-brand retail demands a partnership, which makes identifying and partnering with the suitable partner critical. Retail commerce is regulated at the state level in India’s federal system, therefore only a few regions have the option of denying merchants admission. For overseas companies, the most difficult roadblock is mandatory sourcing regulations. Many Indian goods providers lack the competence and financial resources to serve foreign brands. The requirement for a 50% investment in backend infrastructure necessitates a detailed grasp of supplier selection and developmental business procedures and culture. The primary challenge within the value chain is the fabric production and processing field, which is plagued by a shortage of capacity and the use of outdated technology to the point that upstream and downstream operations are unable to reach their full potential. Fabric production in India is largely disorganised, which prevents the sector from benefiting from economies of scale. Furthermore, government measures to safeguard the environment have impacted the processing business, resulting to the closure of numerous operations.

It is only a corporate lawyer or a corporate law firm which can envisage on the proper application of the laws of the land and can make the investments successful.

Conclusion
Despite having a big domestic market, low labour costs, and a well-functioning democracy, India’s success in attracting FDI has been affecting negatively. Poorly developed infrastructure, a restricted operating environment, and a lack of trade agreements with important markets are the country’s weaknesses. The government has brought up several incentives and initiatives to increase the investment in the textile industry and encouraging the foreign investors.
Authored By: Adv. Anant Sharma & Afsana Khan