INDIA: RBI to release discussion paper on India FDI and FII

Friday April 5 2013

Further to the update of 3rd April, it is being reported that the Reserve Bank will come out with a discussion paper within 15 days on redefining India Foreign Direct Investment (FDI) and India portfolio investment (FII) so as to remove ambiguities.

The paper will reportedly include discussions on legal and taxation issues involved in the implementation of the new definition, as well as how the different instruments of India foreign investment would be treated, and how it would impact investments in listed and unlisted firms.

Per the proposed definition, if an investor has a stake of 10 per cent or less in a company, the investment would be treated as India foreign institutional investment (FII). If an investor has a stake of more than 10 per cent, it would be treated as India foreign direct investment (FDI).

This information will be updated as further details become available.