Wednesday January 24 2018

News Source: Global Disclosures

Focus: Foreign Investment

Type: General

Country: India




The Government of India has reviewed the Foreign Direct Investment (FDI) policy on various sectors and made the following amendments in the Consolidated FDI Policy Circular of 2017 (FDI Policy).

Companies Engaged in Investing in the Capital of other Indian Companies

Para 3.8.3.1 of the FDI Policy has been amended to read as follows:

Foreign Investment in Companies registered as Non-Banking Financial Companies (NBFC) with the Reserve Bank of India, being overall regulated, would be under 100% automatic route.

Additionally, para 3.8.3.2 of the FDA Policy has been amended to read as follows:

Foreign Investment in Core Investment Companies (CICs) and other investing companies, engaged in the activity of investing in the capital of other Indian companies, is permitted under Government approval route. CICs will have to additionally follow RBI’s regulatory framework for CICs.

Competent Authority for FDI Proposals Examining Countries of Concern

Para 4.1.1(ix) of the FDI now reads as follows:

S.No. Activity/sector Administrative Ministry/Department
(ix)(a) Applications involving investment from Countries of Concern falling under automatic route sectors/activities, requiring security clearing as per the FEMA 20, FDI Policy and security guidelines. Department of Industrial Policy and Promotion
(ix) (b) Cases pertaining to Government approval route sectors/activities requiring security clearing as per FRMA 20, FDI Policy and security guidelines. Nodal Administrative Ministries/Departments

 

Civil Aviation

Clause (d) has been added to Para 5.2.8 of the FDI Policy:

(d) In addition to the above conditions, foreign investment in M/s Air India Pvt. Ltd shall be subject to the following conditions:

(i) Foreign Investments in M/s Air India Pvt Ltd., including that of foreign airline(s), shall not exceed 49% either directly or indirectly.

(ii) Substantial ownership and effective control of M/s Air India Pvt. Ltd. shall continue to be vested in Indian Nationals.

Single Brand Product Retail Trading

Para 5.2.15.3 of FDA Policy has been amended as follows:

Sector/Activity % of Equity/FDI Cap Entry Route
Single Brand Product Retail Trading 100% Automatic

 

Click on the link above for further information.