Sunday, December 13, 2015

Government defines manufacturing for FDI

India has activated recent policy changes that liberalised foreign direct investment (FDI) rules and has spelt out the definition of the term "manufacturing" to provide clarity to companies and promote ecommerce.
Under the revised policy, a company manufacturing goods in India is free to sell online without any restrictions. However, the term "manufacturing" had not been clearly defined in the policy.
As per the definition by the Department of Industrial Policy and Promotion, "any change in the physical object resulting in transformation of the object into a distinct article with a different name or bringing a new object into existence with a different chemical composition or integral structure" would qualify as manufacturing.

Companies that assemble products in India, such as those in the automobile and telecom sectors, stand to gain while those that have simply been processing or relabeling products won't qualify as manufacturers, according to experts.


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