NEW DELHI • India is aspiring to compete with the likes of Singapore and Hong Kong for foreign entrepreneurs by offering residence in return for investment.
The Cabinet yesterday approved a plan that allows overseas citizens to settle if they plough enough money into the US$2 trillion (S$2.7 trillion) economy, government spokesman Frank Noronha said in New Delhi, without giving further details.
Foreigners investing 100 million rupees (S$2 million) over 18 months, or 250 million rupees over three years, would be eligible to live in India for 10 years under the Home Ministry proposal, people with knowledge of the matter had said earlier.
The so-called permanent residency status could be extended by another decade, providing certain conditions are met, they said.
Prime Minister Narendra Modi is trying to capitalise on India's position as the fastest-growing big economy to woo investment, particularly in manufacturing, to create jobs for the poor.
The challenge lies in convincing entrepreneurs to embrace a nation with byzantine rules, dirty air and infrastructure snarls - such as the one that held up US Secretary of State John Kerry's convoy in a two-hour traffic jam during an official visit to New Delhi on Monday.
Overseas investors would be allowed to buy one residential property, and spouses and children would be able to work or study, the people said. Nationals of long-time rival Pakistan, or other citizens of Pakistani origin, would be blocked from the programme, they said.
"It's an indication of more broad-mindedness towards foreign investors," said Mr Mohan Guruswamy, a former Indian finance ministry official and chairman at the Centre for Policy Alternatives in New Delhi.
Finance Minister Arun Jaitley unveiled the proposal for long-term residency in February, without providing more details.
Currently, investors get business visas lasting up to five years, according to the text of his budget speech.
Foreign direct investment into India climbed 23 per cent to US$55 billion in the 12 months through March, buoyed by Mr Modi's steps to ease curbs on inflows.
India ranks 130 of 189 economies in the World Bank's Ease of Doing Business Index this year - up four places from a year ago but still much lower than Asian centres such as Singapore and Hong Kong.