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Reading Comprehension Passage: 73 | 100 RC`s for Government Exams Preparation - Bank Exams PDF Download

Directions: Read the passage carefully and answer the questions given beside.
The proposed Outward Direct Investment (ODI) policy may contain provisions to make it easy for many Indian firms, envisioning ambitious plans to transform themselves into multi-national companies (MNC), to go global and expand.
Approval requirements and other norms would be simplified in a manner that would encourage ‘internationalisation’ of Indian companies. However, sources, privy to the developments, also said the ODI policy was expected to tighten regulations to prevent round-tripping structures, where funds are routed by India-based companies into a newly formed or existing overseas subsidiary and then brought back to India to circumvent regulations here. They said the Reserve Bank of India (RBI) and the Finance Ministry (tax department) were concerned about such structures.
In his 2018-19 Budget speech, Finance Minister Arun Jaitley said, “The government will review existing guidelines and processes and bring out a coherent and integrated ODI policy.” According to India Brand Equity Foundation (IBEF), “Indian firms invest in foreign shores primarily through mergers and acquisition (M&A) transactions. With rising M&A activity, companies will get direct access to newer and more extensive markets, and better technologies, which would enable them to increase their customer base and achieve a global reach.” Currently, the jurisdiction over ODI is mainly with the RBI, and the concerned law here is the Foreign Exchange Management Act.
Export-Import Bank of India (EXIM Bank), in a July 2017 research brief, had said: “... policy measures by way of removing hindrances and providing broad support (such as financial and technological), especially to firms with small foreign investment intensities (small overseas investment positions) can help improve firms’ competitiveness, export earnings and sales.” It added, “This support can also be targeted towards export firms particularly if they are planning for technology-seeking ODI.” The research brief also said the EXIM Bank’s Overseas Investment Finance programme offers financial support measures to further Indian firms’ overseas investments, particularly those of outward-oriented small and medium enterprises.
As per Finance Ministry data, India’s ODI rose 56.1% year-on-year from $6.8 billion in 2014-15 to $10.6 billion in 2015-16, and further up by 39.37% to $14.8 billion in 2016-17. Top ten ODI destination countries in FY’15, FY’16 and FY’17 included Mauritius, Singapore, the U.S., the UAE, the Netherlands, the U.K, Switzerland, Russia, Jersey and British Virgin Islands. Cumulatively, these nations were the beneficiaries of 84% or more of India’s ODI during each of those financial years.

Question for Reading Comprehension Passage: 73
Try yourself:The Finance Ministry and RBI were anxious about which of the following?
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Question for Reading Comprehension Passage: 73
Try yourself:Which of the following is true in the context of the passage?
I. The dynamics on the rise in ODI by India is released by IBEF.
II. The government will review new guidelines to form a coherent policy on ODI.
III. The present ODI policy may help Indian firms to transform into MNCs.
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Question for Reading Comprehension Passage: 73
Try yourself:How overseas M&A transactions are supportive to higher customer base as per the passage?
I. They will have a joint customer base of both the companies post merger.
II. It will ensure company’s exposure to new markets and customers.
III. Having global acknowledgement would ensure higher brand value.
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Question for Reading Comprehension Passage: 73
Try yourself:Which of the following is not true as per the passage?
I. RBI Act is the concerned law for ODI.
II. New Zealand is among the top ten ODI destinations.
III. Broad support can also be targeted towards import firms.
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Question for Reading Comprehension Passage: 73
Try yourself:What could be a suitable title of the passage?
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