Authors Niti Paul, Partner and Medha Srivastava, Partner
On April 17, 2020, the Department for Promotion of Industry and Internal Trade, Ministry of Commerce and Industry, Government of India (“DPIIT”), amended paragraph 3.1.1 of the Consolidated FDI Policy, 2017 (“FDI Policy”). Pursuant to this amendment, all investments by 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 under the Government route.
Previously, such restrictions applied only to citizens of Bangladesh or an entity incorporated in Bangladesh. Further, the existing additional restrictions applicable to investments by citizens of Pakistan or an entity incorporate in Pakistan remain unchanged. The amendments have also brought any transfer of ownership of any existing or future FDI in an entity in India, directly or indirectly, which results in the beneficial ownership falling within the restriction stipulated above, under the Government approval route. The Press Note provides that it will come into force from the date of FEMA notification.
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