UP Cabinet okays key amendments to attract foreign investment
Lucknow: In a landmark move aimed at boosting foreign investment in Uttar Pradesh, the state Cabinet, led by
Chief Minister Yogi Adityanath, approved significant amendments to the Incentive Policy 2023 for Foreign Direct
Investment (FDI) and investments from Fortune 500 companies.
The decision, made at a cabinet meeting at Lok Bhavan , introduces major relaxations for foreign investors, expanding opportunities for diverse funding channels.
Finance and Parliamentary Affairs Minister Suresh Khanna outlined the cabinet’s decision, stating, “The Foreign Direct Investment (FDI) policy, initially launched on November 1, 2023, has been amended to include a broader
definition of foreign capital investment, while maintaining the minimum investment threshold of Rs 100 crore.” Khanna emphasised that the amendments are intended to facilitate a wider range of investment sources beyond traditional equity, aligning with the state’s mission to attract
global businesses and spur economic growth.
Previously, FDI in Uttar Pradesh was limited strictly to equity investments as per the Reserve Bank of India (RBI) definition. With this new amendment, however, foreign companies can now include funding secured through loans, debentures, preference shares, external commercial borrowings, standby letters of credit, and other debt securities as part of their foreign capital investment.
“If a company has 10 percent equity and secures 90 percent from other sources, it will now qualify for the same benefits under this policy,”
Khanna explained, noting that this change broadens the scope for companies that leverage external financing to fuel expansion.
In line with the new policy’s enhanced structure, it will now be called the Foreign Direct Investment, Foreign Capital Investment, and Fortune Global 500
and Fortune India 500 Investment Promotion Policy 2023. The policy change accommodates various methods recognized by the RBI for calculating foreign investment, including external commercial borrowing, trade credit, and structured obligations.
