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Foreign entities can now set up their branch in India

Government has relaxed approval process for them in almost major sectors

Policy Pulse
Publish Date: Apr 13 2016 11:44AM | Updated Date: Apr 13 2016 4:25PM

Foreign entities can now set up their branch in India

 To improve ease of doing business for foreign entities, the government on Wednesday relaxed approval process for setting up of their branch, liaison and project offices in the country. 

 
Except for defence, telecom, private security, information and broadcasting and non-government organisation sectors, such approvals can now be given by certain banks, as against the earlier requirement of RBI approval for the same, the Finance Ministry said in a statement. 
 
"Further, anyone who has been awarded a contract for a project by a government authority/PSU would be automatically given approval to open a bank account," it said. 
 
The sectors like defence, telecom, private security, information and broadcasting and non-government organisation, like earlier, will still require to seek the RBI approval before setting up their branch, liaison or project offices in India. 
 
While the RBI gives permission in those cases where 100 per cent FDI is allowed under automatic route, all other cases are referred to the government for approval. 
 
The establishment of such offices in India by foreign entities is regulated in terms of FEMA 22/2000-RB. 
 
As per RBI data, there are 106 authorised dealers category-I banks which includes IDFC Bank, Bandhan Bank, Doha Bank Credit, Suisse AG, Union Bank of India, State Bank of India, Punjab National Bank, Barclays Bank PLC and Abu Dhabi Commercial Bank, among others.