FDI – new rule

Ministry of Commerce, Department for promotion of trade & industry has laid down a new rule, whereby FDI has been restricted to a government approval route in case the FDI is from a country which shares a land border with India or where the beneficial owner of such FDI resides in such country which shares a land border with India. The restriction also applies to transfer of ownership of any existing or future FDI in an entity in India, directly or indirectly, wherein the beneficial ownership is with a resident in a country which shares land border with India, then such transfer will also require government approval.

Presently, there are 6 countries which share land border with India – Myanmar, Bangladesh, China, Pakistan, Nepal, Bhutan.

Click to access pn3_2020.pdf

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