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Govt to keep tabs FDI implementation -- FIPB asks Sunrider to furnish details of investments made

Ambarish Mukherjee

NEW DELHI, July 12

SUNRIDER India Pvt Ltd, the wholly-owned subsidiary of US-based network marketing company, Sunrider International, has been asked by the Foreign Investment Promotion Board (FIPB) to furnish details of the steps taken by the company for setting up own man ufacturing facilities in India and about investments brought in so far.

This is a major move on the part of the Ministry of Commerce and Industry to keep a tab on whether various companies, which have the FIPB approvals for setting up manufacturing bases within a stipulated time frame, are actually doing or whether they are bypassing their manufacturing commitments and continuing with marketing of imported products.

According to a department official, there are a host of companies which have test-marketing permissions during the period their plants are being set up. But increasingly, companies are found to be misusing this. ``So, now we are keeping a close tab and a sking them on exactly what progress is being made on their investment plans.''

In line with this declared stand, the Department of Industrial Policy and Promotion, in a recent letter, a copy of which is available with Business Line, has asked the company ``to furnish to the department the steps taken for setting up its manufacturin g facilities including items to be manufactured and the amount of foreign investments brought in so far.''

Sunrider received FIPB approval in February 2000 which categorically said that ``the approval is subject to the condition that the company would manufacture products as per application and would market those products manufactured by them in India and no other products.'' The approval is valid for a period of two years which will expire in February 2002.

Speaking to Business Line, the Country Manager of Sunrider India, Mr Gurdeep Singh, said: ``Right now, we are importing all our products from the US. We have engaged a MNC real estate consultant which has already given its input about where the plant wil l be located. By October-November this year, we will be able to say exactly where and how big the plant will be which we intend to set up here. It will involve an investment of around $3 million and we have approval for investing up to $27 million.''

Mr Singh said that the company has permission for test-marketing. He said after identifying the plot of land, ``we will be taking something between 12 and 18 months to commence production which will be somewhere around the middle of 2003.''

Sunrider is the third largest network marketing company in the world in terms of number of distributors and global presence with current global turnover in excess of $1 billion. It is one of the six foreign companies engaged in network marketing which ar e at present operating in India. Out of the remaining five, four are US-based, namely Amway, Avon, Tupperware and Herbal Life, and the fifth is the Sweden-based Oriflame.