Mumbai, Feb. 7: The Salim Group has cleared its first major hurdle to investing in Bengal.

The Foreign Investment Promotion Board (FIPB) has approved the Indonesian group’s proposal to establish a holding company that will direct investments into a series of downstream companies.

In effect, New Kolkata International Development Private Ltd (NKID) will serve as a mother for all Salim Group projects — some of which will be established in collaboration with non-resident Indian Prasoon Mukherjee and his Universal Success Enterprises Ltd.

It has entered into an agreement with Mukherjee to set up a two-wheeler manufacturing unit at Uluberia in Howarah.

The group plans to set up a clutch of projects that include special economic zones — its proposed SEZ is at the centre of the land row in Nandigram — industrial parks, townships and housing projects.

After securing the FIPB’s approval, the proposal now has to be cleared by finance minister P. Chidambaram, and then placed before the Cabinet Committee of Economic Affairs. All projects involving an investment of over Rs 600 crore have to be cleared by the CCEA.

Investment details of the Salim proposal were not immediately available.

NKID will serve as a holding company for what is being called the New Kolkata Project. It will make downstream investments in several joint ventures with third parties and special purpose vehicles (SPVs) which will execute parts of the grand project.

NKID already has a development agreement with the West Bengal Industrial Development Corporation Ltd (WBIDC) to act as project developer.

When the matter came up for hearing at the FIPB, the department of economic affairs within the finance ministry said it had no objections to the proposal but the group must comply with various regulations.

One such condition as mandated by Press Note 9 of 1999 is that foreign companies would have to bring in requisite funds from abroad and not leverage funds from the domestic market for investments in the country.