India to launch $1.5m investor visa

Posted on August 31, 2016

A man walks by India's consulate general in New York, December 18, 2013. Indian diplomat Devyani Khobragade, who was arrested in the US, has been transferred to the Indian permanent mission at the UN, in order for her to benefit full diplomatic immunity. The arrest and detention of Khobragade, India's deputy consul general in New York, on visa fraud charges, has created a diplomatic uproar, with punitive steps taken against US State Department officials in New Delhi. AFP PHOTO/Emmanuel Dunand / AFP PHOTO / EMMANUEL DUNAND©AFP

India hopes to lure wealthy foreign entrepreneurs to set up shop in the country, with the creation of an “investor visa” category that will bestow long-term residency on foreigners who invest $1.5m in the country and generate 20 jobs every year.

Until now, New Delhi has had no provision for foreign citizens — excepting those of ethnic-Indian descent — to obtain long-term residency in India. Entrepreneurs were either issued business visas or employment visas, both of which had conditions such as annual registration with the police, leaving the country periodically, or returning to their home country for renewal.

    However, the new investor visa, which was approved by Prime Minister Narendra Modi’s cabinet on Wednesday, is aimed at creating a more welcoming climate for foreigners willing to make job-generating investments in India.

    Foreigners who invest $1.5bn in India over 18 months — or $3.7m over three years — will be granted what the government dubbed “permanent residency status” that will last for 10 years, but can be renewed for another decade.

    However, the investments should “result in generating employment for at least 20 resident Indians every financial year”, the cabinet said in a statement. 

    As “permanent residents”, the investors will be permitted to remain in India without registering with the police, or periodically going abroad; and their spouses or other dependants will be permitted to work in the country legally. They will also be allowed to purchase a residential property.

    “It’s very important psychologically, and I think that the announcement will attract a lot of interest and be very welcome,” said Mark Runacres, a former British diplomat who now runs an executive search firm in New Delhi.

    “Conceptually what it is signalling is that India doesn’t just want people’s money — which was the signal before,” he said. “It understands that people want to come and build their own companies and be part of the scene rather than have that niggly feeling that there always was before of ‘leave your money at the door, and don’t tell us what to do here’.” 

    India’s impermanent residents

    Congress President Sonia Gandhi (C) waits for Vice President Rahul Gandhi and former Prime Minister Manmohan Singh to address the media after a protest by Congress Party Members of Parliament at the Mahatma Gandhi statue outside Parliament house in New Delhi on August 4, 2015. Congress MPs protested outside Parliament, including former Prime Minister Manmohan Singh, Congress vice-president Rahul Gandhi and other senior party leaders who raised slogans against Prime Minister Narendra Modi and the NDA government following the suspension of 25 of their MPs, and demanded the resignation of Foreign Minister Sushma Swaraj. AFP PHOTO/ PRAKASH SINGH (Photo credit should read PRAKASH SINGH/AFP/Getty Images)

    The country could do with a more welcoming approach to global citizens, writes Amy Kazmin

    Many details of the scheme remain to be publicly clarified, including how the application process will work, how soon prospective investors will be able to apply, and whether the 10-year visas can be renewed more than once.

    It also remains to be seen what type of investors may find the scheme appealing. The investment threshold is low enough that it would not require establishing a large manufacturing plant, but appears sufficiently high to exclude the many young foreign professionals, including designers, that come to India to set up small businesses. 

    Mr Runacres said he believed the designated investment levels appeared aimed at investors that might create new service industry businesses, perhaps in areas such as health and education. But it could also pave the way for India to accept more foreign participation in the economy, even among industries that do not require them to stump up large sums of cash.

    “Will we have thousands of applicants appear on the first day? I doubt it,” he said. “But if it works well, it will be a precedent. It’s a first step.”

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