Lok Sabha Question No. 262 (STARRED), answered on 2023-03-20
Subject: Foreign Companies and their Subsidiaries
Ministry: CORPORATE AFFAIRS
Asked by: T. R. Paarivendhar

## GOVERNMENT OF INDIA MINISTRY OF CORPORATE AFFAIRS

## LOK SABHA STARRED QUESTION NO. *262 ANSWERED ON MONDAY, MARCH 20, 2023 PHALGUNA 29, 1944 (SAKA)

## FOREIGN COMPANIES AND THEIR SUBSIDIARIES

## QUESTION

*262: DR. T.R. PAARIVENDHAR:

Will the Minister of CORPORATE AFFAIRS कारपोरेट कार्य मंत्री

be pleased to state:

- (a) whether many foreign companies and their subsidiaries which have registered functional offices in various parts of the country have closed down their business operations in the country;
- (b) if  so,  the  details  thereof  along  with  the  reasons  for  such companies and its subsidiaries closing down their business operations/ offices during last 10 years;
- (c) whether the Government has any data on the total number of foreign companies and their subsidiaries which are currently continuing  their  business  operations  in  the  country  and  if  so,  the details thereof; and
- (d) the  total  number  of  Indian  nationals  working  in  the  above companies as on date?

ANSWER

The Minister of Finance & Corporate Affairs.

(वित्त और कॉर्पोरेट मामलों क े  मंत्री)

(SMT. NIRMALA SITHARAMAN)

श्रीमती निममला सीतारामि

- (a) to (d): A statement is laid on the Table of the House.

STATEMENT  REFERRED  TO  IN  REPLY  TO  LOK  SABHA  STARRED QUESTION NO. *262 FOR ANSWER ON 20.03.2023.

(a) & (b): A ' Foreign Company ' has been defined under sub-section (42) of Section 2 of the Companies Act, 2013. A ' foreign company ' means any company or body corporate incorporated outside India which -(a) has a place of business in India whether by itself or through an agent, physically or through electronic mode; and (b) conducts any business activity in India in any other manner.

Many  foreign  companies  have  Indian  subsidiaries  which  are  Indian companies but are subsidiaries of foreign holding companies.  Data shows  that foreign companies  and  their subsidiaries keep on registering under Section 380 of the Companies Act, 2013 in various parts of  the  country  and also  close down their business operations from time to time. The details are as under:-

|   Year |   Number of Foreign Companies that have registered under Section 380 of the Companies Act, 2013 |   Number of foreign companies registered under Section 380 of the Companies Act, 2013 that have closed their place of business |   Number of companies incorporated in India whose holding company is incorporated outside India |   Number of companies incorporated in India whose holding company is incorporated outside India that have closed their place of business in India |
|--------|-------------------------------------------------------------------------------------------------|--------------------------------------------------------------------------------------------------------------------------------|-------------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------|
|   2012 |                                                                                             182 |                                                                                                                            147 |                                                                                             903 |                                                                                                                                                 4 |
|   2013 |                                                                                             188 |                                                                                                                            167 |                                                                                             818 |                                                                                                                                                 2 |
|   2014 |                                                                                             184 |                                                                                                                            112 |                                                                                             732 |                                                                                                                                                 2 |
|   2015 |                                                                                             153 |                                                                                                                            125 |                                                                                            1051 |                                                                                                                                                 5 |
|   2016 |                                                                                             148 |                                                                                                                            123 |                                                                                             986 |                                                                                                                                                 2 |
|   2017 |                                                                                             149 |                                                                                                                            136 |                                                                                            1182 |                                                                                                                                                15 |

| 2018     |   102 |   111 |   1364 |   13 |
|----------|-------|-------|--------|------|
| 2019     |   137 |   133 |   1712 | 1815 |
| 2020     |    90 |   120 |   1244 |  163 |
| 2021     |    75 |   115 |   1692 |  349 |
| 2022     |    64 |    78 |   1940 |  505 |
| 2023 Jan |     1 |     2 |    163 |   49 |
|          |  1473 |  1369 |  13787 | 2924 |

The closing of operations is a matter of commercial business decision. It depends on a host of factors such as viability of operations, sectoral strategy, global priorities, market size, capital and resource allocation within the company as well as the decision of a particular business entity  whether  to  operate  in  different  geographical  areas  or  not. Further, company wise details are available on the MCA website and can be accessed as under: MCA Website Parliament Questions & Assurances others

(c) Total number of foreign companies and companies incorporated in India whose holding companies is incorporated outside India, which are currently continuing their business operation in the country is as follows:

|   Number of Foreign Companies that have registered under Section 380 of the Companies Act, 2013 |   Number of companies incorporated in India whose holding company is incorporated outside India |
|-------------------------------------------------------------------------------------------------|-------------------------------------------------------------------------------------------------|
|                                                                                            3295 |                                                                                           14173 |

Details  of  the  above  are  available  on  the  MCA  website  and  can  be accessed as under: MCA Website Parliament Questions & Assurances others

(d) No data in regards to Indian nationals working in foreign companies and subsidiaries is maintained with the Ministry. *******