FDI in Roads and Highways Sector in India - Process & Fees

100% FDI is allowed under FDI in roads and highways sectors through an automatic route.

• List of names, addresses, and identification proof of all foreign collaborators of the investor company/entity
• From both investor/investee entities- Certification of Incorporation and MoA
• Copy of joint venture agreement/ shareholders agreement/technology
• Copy of downstream intimation
• Copy of relevant past FIPB/SIA/RBI joint with the current proposal
• Copy of Downstream Intimation
• An affidavit to ensure all documents are relevant
• Valuation certification approved by a certified chartered accountant
• CS Certificate
• Declaration by the Authorized Representative of the Indian Company/LLP
• Pre and post-shareholding pattern in the Indian company
• Copy of the order of the High Court on the scheme of merger/ demerger/ amalgamation (if applicable)
• RBI approval on the amount of refund concerning the amount of the issue (if applicable)
• Valuation certificate
• Approval letter (if non-compliant with the guidelines - if applicable)
• Relevant RBI approvals for an issue of equity shares against funds payable to the foreign investor
• FIRC/ Debit statement
• Know Your Customer (KYC)

There are conditions tapping for the procedure of FDI approval which must be understood by investors.

1. Robust Demand - Compared to over 25.04 lakh units sold during the same period last year, over 27 lakh passenger vehicles were sold between April and November of 2023. In FY23, passenger vehicle (PV) sales increased by 26.7% on an annual basis. The total number of dispatched passenger vehicles rose to 38.90 lakh units.
2. Increasing investment - The Ministry of Road Transport and Highways has been given Rs. 2.7 lakh crore (US$ 33 billion) by the Indian government in the Union Budget 2023–24. As of March 2022, the expected transfer from the National Investment Fund (NIF) was Rs. 20,000 crore (US$ 2.61 billion).
3. Policy support - To encourage owners of older vehicles with higher fuel consumption expenses to get rid of them, the government published a notice in October 2021 about concessions under the Vehicle Scrapping Policy (which goes into effect in April 2022).
4. Attractive opportunities - There are 202 national highways in the nation that are 6,270 km long and are now in the implementation stage. As part of the Bharatmala Pariyojana, a network of 35 multimodal logistics parks that can handle 700 MMT of goods are planned, with a total investment of approximately Rs. 46,000 crore (US$ 5.55 billion).

1. Technology transfer - Foreign businesses frequently have access to cutting-edge technologies for building, maintaining, and repairing roads. With improved traffic management and signs, safer roads can be designed with the help of advanced technologies.
2. New opportunities for job - Road infrastructure development generates employment in a number of industries, including civil engineering and construction, the production of building materials, transportation, and logistics.
3. Profitability - Foreign investors can reap substantial profits from their investments in road projects that are successful, particularly given the growing worldwide need for infrastructure.
4. Development in infrastructure - FDI provides much-needed funding for the construction of new highways, bridges, and tunnels, enhancing the network of transportation as a whole.

In the road sector, foreign direct investment (FDI) has the potential to spur development and provide substantial advantages for both foreign investors and the host nation. FDI provides much-needed funding for the construction and renovation of tunnels, bridges, and highways. Better connectivity, shorter travel times, and easier access to markets and services are the results of this, which eventually spurs economic growth. Roads become more effective, safer, and ecologically friendlier when cutting-edge construction technologies and sustainable practices are transferred thanks to foreign direct investment (FDI).

Several other factors to consider for investors while investing in heavy industries are listed below:

• Before involving huge investments, applicants must be prerequisites to check the kind of companies the government allows them to invest in. Because investment in the stock market is volatile and may not recover your loss, leading to unwriggled investment which will not recover at the time of redemption of company loss.
• Additionally, before application applicants need to inspect and ensure that all the requisite documents are submitted online without discovering any omissions and incorrect information within the documents. FDI is largely inspired to bring investors forth along with certain advantages that benefit sectors.

Investors must also need to check eligibility criteria for buying investment in India in sectoral companies.