To reap the expected benefits from foreign direct investment (FDI) India assigns considerable importance to attracting large amounts of FDI. In many sectors, FDI is allowed freely and without any limits. However, keeping in view the need to retain a degree of control over sensitive areas, limits are placed on FDI in a few sectors. With a view to remove ambiguity and to prevent circumvention of the limits placed on FDI in different sectors, the Department of Industrial Policy and Promotion (DIPP) has brought out a Draft Press Note “FDI Regulatory Framework” which would be formally announced by the beginning of the next financial year, after taking into account feedback from stakeholders. Besides restating the sectoral limits and the steps involved in issuing necessary approvals, the Draft gives an indication of the type of inflows that are being treated as FDI and how a company with foreign equity will be classified for purposes of measuring indirect foreign equity.

Given the ambiguity surrounding the definition of FDI even at the international level and the efforts made, from time-to-time, to refine the criteria and bring about uniformity across different countries, changing characteristics of global FDI flows both sectorally and in terms of the nature of foreign investors, the apparent disagreement over the criteria proposed by DIPP within certain Indian official agencies and the recent interpretation of the Securities Appellate Tribunal regarding ‘control’, the Draft Press Note offers a good opportunity to discuss issues surrounding the measurement of FDI on one hand and the nature of FDI inflows, as reported from time-to-time by India. Furthermore, there is a need to assess the developmental impact of such inflows given the importance of FDI in the Indian economy.

To deliberate on these issues, ISID and the Research & Information System for Developing Countries (RIS) are jointly organizing the Symposium 'Concepts, Definition and Data Issues Relating to FDI in India' on March 16, 2010, at the institute's premises in 4 Institutional Area, Vasant Kunj Phase-II, New Delhi. A Background Paper would be presented by the two Institutes to provide a basis for the deliberations.

The Symposium starts at 10.30 am and will continue in the post-lunch session.

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