India revises FDI policy to prevent opportunistic take of Indian companies amidst COVID-19
New Delhi, Apr 18: The Government of India has revised the Foreign Direct Investment policy for curbing opportunistic takeovers/acquisitions of Indian companies due to coronavirus.
A non-resident entity can invest in India, subject to the FDI Policy except in those sectors/activities which are prohibited, the order said.
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 a any such country, can invest only under the Government route, the order further stated.
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, the government also said.
The revised FDI rule seeks to curb opportunistic take-overs or acquisitions of companies due to the COVID-19, the government also said. A transfer of ownership in an FDI deal that benefits any country that shares a border with India will also need government approval, the government also said.
The earlier FDI policy was limited to allowing only Bangladesh and Pakistan via the government route in all sectors. The revised rule has now brought companies from China under the filter of the government route.