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On Saturday, the government made its prior permit compulsory for foreign investments from countries that share a land border with India to curb “opportunistic acquisitions” of national companies after the COVID-19 pandemic, a measure that will restrict China’s FDI. The countries that share land borders with India are China, Bangladesh, Pakistan, Bhutan, Nepal, Myanmar and Afghanistan.
“An entity in a country, which shares a land border with India or where the beneficial owner of the investment in India is located or is a citizen of any country, may invest only under the government’s route,” according to a press release issued by the Department for the Promotion of Industry and Internal Trade (DPIIT).
He said the government has modified FDI (foreign direct investment) policy to curb “opportunistic acquisitions / acquisitions” of Indian companies due to the COVID-19 pandemic.
He also said that government approval will be mandatory for any transfer of ownership of any existing or future FDI in a company in India, resulting in a change in real ownership, under this new restriction.
“In the case of the transfer of ownership of any existing or future FDI in an entity in India, directly or indirectly, resulting in beneficial ownership falling within the restriction or competence of the (amended policy), such subsequent change on beneficiary property also require government approval, “he said.
The decision would restrict China’s foreign investment amid fears that companies in the neighboring country may make takeover bids at a time when domestic companies are fighting the blockade imposed to stem the rapid spread of the coronavirus.
Currently, that standard was there for investments from Pakistan. A company may invest in India, subject to FDI policy, except in those sectors / activities that are prohibited. “In addition, a citizen of Pakistan or an entity incorporated in Pakistan may invest, only under the Government’s route, in sectors / activities other than defense, space, atomic energy and sectors / activities prohibited for foreign investment,” according to the standard. current.
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