Govt proposes relaxing FDI rules governing JVs

Proposing a major relaxation in a 12-year FDI rule, the Industry Ministry today made a case for allowing foreign investors to bring in fresh money and technology to India irrespective of the impact on local partners in any existing joint venture.

Under the present dispensation, a foreign player who entered India before January 12, 2005 has to take government approval and “demonstrate” that fresh investment in the same field would not affect interest of his domestic joint venture partner.

The FDI rules proposed to be relaxed was not applicable to the joint ventures entered after January 12, 2005. Thus, the changes would help foreign investors who entered JVs after this date.