UPDATES TO THE FOREIGN DIRECT INVESTMENT POLICY (India)

Author: Rashmi Grover

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Publisher: Nagashima Ohno & Tsunematsu

Journal / Book: NO&T Asia Legal Review No.23 (May, 2020)

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*Please note that this newsletter is for informational purposes only and does not constitute legal advice. In addition, it is based on information as of its date of publication and does not reflect information after such date. In particular, please also note that preliminary reports in this newsletter may differ from current interpretations and practice depending on the nature of the report.

The Government of India has been revising the Foreign Direct Investment (“FDI”) Policy of India from time to time. Some of these changes are made with an intent to liberalize the extant rules and to provide clarity on certain aspects. A key change has been triggered as a result of the COVID-19 pandemic in order to prevent opportunistic takeovers of Indian companies, whose values have been significantly eroded due to the lockdown and business closures. In April 2020, the Ministry of Finance amended the Foreign Exchange Management (Non-Debt Instruments) Rules, 2019 (“NDI Rules”) to five effect to these changes. A brief summary of the key revisions is set out below:

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