India is aspiring to compete with the likes of Singapore and Hong Kong for foreign entrepreneurs by offering residence in return for investment.
The Cabinet yesterday approved a plan that would allow foreigners to settle if they plow enough money into the US$2 trillion economy, government spokesman Frank Noronha said in New Delhi, without providing further details.
Foreigners investing 100 million rupees (US$1.5 million) over 18 months, or 250 million rupees over three years, would be eligible to live in India for 10 years under the Ministry of Home Affairs’ proposal, people with knowledge of the matter had said earlier, asking not to be identified as the details were not public.
The so-called permanent residency status could be extended by another decade providing certain conditions are met, they said.
Indian Prime Minister Narendra Modi is trying to capitalize on the nation’s position as the fastest-growing big economy to woo investment, particularly in manufacturing to create jobs for the poor.
The challenge lies in convincing entrepreneurs to embrace a nation with byzantine rules, dirty air and infrastructure snarls — such as the one that emboxed US Secretary of State John Kerry’s convoy in a two-hour traffic jam during an official visit to New Delhi on Monday.
Foreign investors would be allowed to buy one residential property, and their spouses and children would be able to work or study, the people said.
However, nationals of long-time rival Pakistan, or other citizens of Pakistani origin, would be blocked from the program, they said.
“It’s an indication of more broad-mindedness towards foreign investors — it’ll be easier for them to come to India,” said Mohan Guruswamy, a former Indian ministry of finance official and chairman at the Centre for Policy Alternatives.
At the same time, investors looking to settle somewhere would likely look for other destinations such as Canada, he said.
Indian Minister of Finance Arun Jaitley unveiled the proposal for long-term residency in February, without providing more details. Currently, investors get five-year business visas, according to the text of his budget speech.
Foreign direct investment in India climbed 23 percent to US$55 billion in the 12 months ending March, buoyed by Modi’s steps to ease curbs on inflows.
Indian Minister of Commerce Nirmala Sitharaman on Tuesday said that Asia’s No. 3 economy would open more sectors to investment from abroad. Even so, entrepreneurs still have to adhere to detailed rules governing participation in everything from defense to e-commerce.
India ranked 130th of the 189 economies in the World Bank’s Ease of Doing Business index for this year.
That is up four places from a year ago, but still much lower than Asian centers such as Singapore and Hong Kong, which have long offered investor visa options.
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