Foreign Direct Investment: India changes in rules against China

 Created  New FDI rules against neighbouring countries(China) by India during COVID-19 pandemic

by Patwal,  ⇊Apr 27, 2020 

Recent FDI changes, the Indian Government amended its Foreign direct investment (FDI) policy to put a blanket ban on investments through the automatic route.

As per the new amendment, FDI investments into Indian companies from the neighbouring countries will now require a nod from the government. This will be applicable to all countries that share a land border with India – such as China among others.

This move is aimed to curb opportunistic takeover due to the COVID-19 pandemic, especially from China, now puts all investments from India’s neighbors under the approval route.

The Department for Promotion of Industry and Internal Trade (DPIIT) has by Press Note No. 3 (2020 Series) amended the FDI policy for curbing ‘opportunistic takeovers/acquisitions of Indian companies due to the current COVID-19 pandemic’.

1. This comes after China's central bank recently raised stake in Housing. Development Finance Corporation (HDFC) to a little over 1 percent. 

 2. Globally, transactions by Chinese firms and institutions have come under observation recently since the assets are being purchased at low valuations. Nations such as the US, Japan and Australia have already placed restrictions on Chinese companies buying assets.

Thanks
For reading👍