Govt defers Mahindra's FDI proposal in defence

New Delhi: The government has deferred decision on Mahindra group's proposal to bring in FDI for a defence production joint venture and on another application by pharma major Pfizer to bring in foreign equity in a company.

However, a proposal from Vedanta Group company Sesa Goa was approved by the Foreign Investment Promotion Board (FIPB), the nodal agency for clearing applications for foreign direct investment (FDI) into the country.

The Sesa Goa proposal does not entail any fund flow and involves transfer of equity by way of share swap in the business of exploring, mining, winning, importing, and certain mineral exports, the Finance Ministry said.

The FIPB, headed by Economic Affairs Secretary R Gopalan, approved eight FDI proposals worth Rs 100 crore in its last meeting earlier this month, but deferred decision on eight.

At the meeting, the Board also referred Shriram Financial Ventures' Rs 2,000 crore FDI proposal to the Cabinet Committee on Economic Affairs (CCEA).

The Chennai-based company had sought FIPB's approval for induction of foreign equity in an investment company.

The Proposal of Zooropa Foods Private Limited, Haryana, which was cleared by the Board will bring in FDI worth Rs 100 crore.

As per the ministry, Mahindra and Mahindra proposal was to set up a new JV to develop, manufacture and provide service support for radar systems and various kinds of defence electronic systems. It however did not provide reasons for deferment of decision on the proposal.

Pfizer has sought Board's nod for induction of foreign equity in an operating cum investing company to carry out the business in pharmaceutical sector.

Decisions on two other proposals related with pharma sector, including that of Singapore based B Braun Singapore Pte, were deferred in the FIPB meet.

B Braun Singapore was seeking permission for acquisition of shares of a company engaged in the business of life saving intravenous fluids and ophthalmic products.

The FIPB also rejected eight FDI proposals including that of A2Z Waste Management and Shriprop Housing Pvt Ltd and Shriram Properties.

India allows FDI in most of the sector through automatic route, but applications related with certain sensitive sectors like pharmaceutical, defence and telecom, are cleared by the FIPB. Also, proposals worth over Rs 1,200 crore require approval of the CCEA.

The next meeting of FIPB is scheduled for June 29.