UP tweaks FDI policy, widens incentives ambit for foreign investors

Uttar Pradesh Chief Minister Yogi Adityanath

Foreign firms investing in Uttar Pradesh by bringing in equity as well as loans will now be eligible to avail benefits under the state government's incentive policy. Earlier, incentives under the policy were available to only equity investments.

A decision in this regard was taken by the state cabinet chaired by Chief Minister Yogi Adityanath on November 4.

The incentive policy has now been amended as 'Foreign Direct Investment, Foreign Capital Investment and Fortune Global 500 and Fortune India 500 Investment Promotion Policy 2023'.

The incentives under the policy include land and capital subsidy along with tax benefits.

"Through this amendment, the Yogi government has given big relief to foreign investors. Through this, now foreign companies will also be able to invest in the state which brings in investment through equity as well as loan or any other source. With this decision of Yogi government, there is a possibility of increase in foreign investment in the state," an official statement said.

Briefing about these decisions, UP Finance Minister Suresh Khanna said that a slight amendment has been made in the policy, though the minimum investment for eligibility in the policy will continue to be Rs 100 crore.

He added that companies manage money from other sources also, besides equity to expand their business.

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"If a company has only 10 percent equity and has arranged 90 percent of the investment from other sources, then also it will be eligible for benefits," he added.

He further said foreign companies can bring in capital in the form of preference shares, debentures, external commercial borrowings, stand by letters of credit, letters of guarantee and other debt securities.

With PTI inputs