Chinese consumer electronics major Haier International has received the Foreign Investment Promotion Board (FIPB) and the Department of Telecom (DoT) approvals for setting up a telecom marketing venture in the country.
The approvals are of significance as the company had earlier approached the Reserve Bank of India (RBI), which later referred the proposal to the FIPB.
The company has also entered into a tie-up with Reliance Communications and Tata Teleservices for selling its handsets. The Tatas have reportedly ordered 3,000 Haier handsets.
The company has been granted approval for setting up a joint venture firm for marketing and distribution of Haier brand CDMA and GSM mobile handsets. Haier International was planning to set up a joint venture company with a foreign equity stake of 51 per cent, sources close to the development said today.
The company is planning an Indian foray through its subsidiary Haier Telecom and has roped in Delhi-based Nascomed Technologies as its partner for Indian operations.
According to FIPB filings, the company expected a foreign currency inflow worth Rs 1.12 crore (Rs 112 million).
When contacted, a Haier spokesperson confirmed that the company received approvals from both the FIPB and the DoT.
The Reserve Bank earlier forwarded Haier's proposal to the FIPB, stating that in line with the government's stand on investments by Chinese firms, it should be scrutinised closely.
The apex bank is of the view that the proposal has to be cleared by the FIPB and the DoT before it can give a go-ahead, even though it falls under the automatic route of clearance. Haier is planning to set up its subsidiary through the automatic route.
Under the present investment guidelines, a wholesale venture falls under the automatic route and ideally any foreign company could set up operations here without a government approval. However, the company needs to inform the central bank about forex inflow.