Japanese two-wheeler major Yamaha's plans to transfer its Indian sales business to a new entity -- India Yamaha Motor -- have hit a speedbreaker with the Industry Ministry against allowing the company to import products.
Yamaha Motor India Sales (YMISPL) had sought Foreign Investment Promotion Board (FIPB) approval to transfer its business to India Yamaha Motor (IYMPL), a wholly-owned subsidiary of Yamaha Motor Co, Japan.
Highly-placed sources say the FIPB has deferred a decision on the proposal in its recent meeting after representatives of the Department of Industrial Policy and Promotion said IYMPL should not be allowed to import as it would lead to retail trading, something that does not conform to FDI policy.
When contacted a senior official of IYMPL said: "FIPB had asked for some clarifications and we have given them the clarifications. The proposal will be approved in the next meeting of FIPB."
The FIPB is understood to have directed the DIPP to examine the company's proposal in detail as the board had given its nod in a similar case in September last year for transfer of foreign collaboration approval of Yamaha Motor India Pvt Ltd to India Yamaha Motor.
