CA Deepak Gupta (In Practice) (81 Points)
30 January 2012I want to know the regulations for FDI/Investment in an Indian Company engaged in the business of Dairy Farming, by an NRI. In nutshell I know that an NRI cannot purchase Agricultural Land in India. But can he invest in a Company which is in the business of Dairy Farming and has purchased/will purchase some Agricultural land to carry on its operations?
Kindly give answer supported with relevant regulations.
Thanks.
Ketan Ranade
(Company Secretary)
(64 Points)
Replied 09 March 2012
hey buddy my case is similar to that of urs the only diff is we are engaged in agriculture activity which is permitted under fema that is Seed Development and for that purpose we are looking forward to purchase agriculture land. so want to ask you do u got any solution to the said query?? if yes please mail me or reply on this post.
Thanks
P. Contractor
(Director)
(21 Points)
Replied 10 July 2012
HI both,
One answer to your question is that as an FDI investment is allowed in agri related company, however agri company in most of the indian states are not allowed to buy any agricultural land unless a special provision made by the state govt.
There is though a provision under waste land management scheme which allows an agri company to lease govt. waste land for 20 yrs at a very nominal rental rate and post the lease periond the laws as per bombay tenancy act applies. This route comes with a pre-condition that the wasteland needs to be developed and made cultivable by the lessor, and that should be achieved by scientific way of farming and deployment of micro/drip irrigation system is a must. Ofcourse this methodology doesnt give the company status of a farmer and benefits of a farmer.
While on Dairy sector, I am also looking for informantion on if an FDI/FII is allowed and would really look forward to any evidence information on this topic.
I hope some of the above information helps and thanks in advance if you have answer to my query on FDI in Dairy industry.
CAclubindia
