Government of India
Ministry of Commerce & Industry
Department for Promotion of Industry and Internal Trade
FDI Policy Section

Press Note No. 03 (2020 Series)

Subject: Review  of  Foreign  Direct  Investment (FDI)  policy  for curbing opportunistic takeovers/acquisitions of Indian companies due to the current COVID-19 pandemic

The Government of India has reviewed the extant FDI policy for curbing opportunistic takeovers/acquisitions of Indian companies due to the current COVID-19 pandemic and amended para 3.1.1 of extant FDI policy as contained in Consolidated FDI Policy, 2017 as under:

1. Present Position

Para 3.1.1: A non-resident entity can invest in India, subject to the FDI Policy except in those sectors/activities which are prohibited. However, a citizen of Bangladesh or an entity incorporated in Bangladesh can invest only under the Government route. Further, a citizen of Pakistan or an entity incorporated in Pakistan can invest, only under the Government route, in sectors/activities other than defence, space, atomic energy and sectors/activities prohibited for foreign investment.

2. Revised Position

Para 3.1.1:

3.1.1(a) A non-resident entity can invest in India, subject to the FDI Policy except in those sectors/activities which are prohibited. However, 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. Further, a citizen of Pakistan or an entity incorporated in Pakistan can invest, only under the Government route, in sectors/activities other than defence, space, atomic energy and sectors/activities prohibited for foreign investment.

3.1.1(b) In the event of the transfer of ownership of any existing or future FDI in an entity in India, directly or indirectly, resulting in the beneficial ownership falling within the restriction/purview of the para 3.1.1(a), such subsequent change in beneficial ownership will also require Government approval.

3. The above  decision  will  take  effect  from  the  date  of  FEMA  notification.

(Manmeet Kaur Nanda)
Joint Secretary to the Government of India

DPIIT File No.: No.5 (5)/2020-FDI Policy, dated17/04/2020

Copy forwarded to:

1. Press Information Officer, Press Information Bureau- for giving wide publicity to the above Press Note.

2. Joint Secretary, Department  of  Economic Affairs, North Block, New Delhi 

3. Reserve Bank of India, Foreign Exchange Department, – Mumbai

For suitably incorporating the policy   changes   in   Foreign Exchange Management (Non- Debt Instruments) Rules, 2019, the relevant schedules thereof and FIRMS portal.

4. NIC Section in the Department for Promotion of Industry and Internal Trade for uploading the Press Note on DPIIT’s website.

5. Hindi Section, DPIIT- for providing Hindi version.

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