FDI Updates - India

  • 23 Apr 2020 12:25 AM
    Message # 8921714

    The Government of India (“GOI”) on April 17, 2020 amended its Foreign Direct Investment (“FDI”) Policy of India vide Press Note No. 3 (2020 Series).


    The FDI Policy lays down policy of the Government of India subject to which investments are made by foreign shareholders in Indian entities. It also provides restrictions with respect to certain countries such as that a citizen of Bangladesh or an entity incorporated in Bangladesh could invest only with prior approval of the Government of India while a citizen of Pakistan or an entity incorporated in Pakistan could invest only with prior approval of the Government of India and that too in sectors/activities other than defense, space, atomic energy and sectors/activities prohibited for foreign investment.


    The latest Note prescribes that an entity of a country, which shares land border with India or where the beneficial owner of an investment into India, is situated in or is a citizen of, any such country, can invest only with prior approval of the Government of India. The countries sharing land border with India are Afghanistan, Bangladesh, Bhutan, China, Nepal, Myanmar and Pakistan.

    Further, the Government has also prescribed that in case of transfer of ownership or beneficial ownership of shares, held in an entity in India, directly or indirectly, resulting in beneficial ownership of such shares falling in the hands of an entity situated in or a citizen of, any such country shall also require Government’s approval.

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