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The response was to a question raised by YSR Congress Party MP N Reddeppa, who had asked if there were any proposals to ease restrictions on foreign investments from companies or investors based in countries that share land borders with India.
In a written reply in the Lok Sabha, Sitharaman said: “54 FDI proposals received during the past year and current year from investor/beneficial owners from China and Hong Kong are pending for decision with the government as of March 21.”
In April 2020, the government amended the foreign direct investment policy in an attempt to “curb opportunistic” takeovers or acquisitions of Indian companies due to the Covid-19 pandemic.
“An entity of a country that shares a land border with India or where the beneficial owner of an investment in India is situated in or is a citizen of any such country can invest only under the government route,” according to the amendment. This also extended to the transfer of ownership of FDI.
“Any transfer of ownership of any existing or future FDI in an entity in India resulting in the beneficial ownership falling within the aforesaid jurisdiction(s) will also require government approval,” it said.
The amendment was enforced through the Foreign Exchange Management (Non-Debt Instruments) Amendment Rules, 2020.
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