The Centre on Saturday tightened norms for Foreign Direct Investment in India from neighbouring countries, with a view to curb “opportunistic takeovers or acquisitions” of Indian companies due to the Covid-19 pandemic, NDTV reported quoting a government official.
The Department of Promotion of Industry and Internal Trade of the Ministry of Commerce and Industry issued a notification saying that companies from countries that share a border with India will have to approach the government for investments in India, and not go the automatic route.
“A non-resident entity can invest in India, subject to the FDI Policy except in those sectors/activities which are prohibited,” the department 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 any such country, can invest only under the Government route.”
The department added that a citizen of Pakistan or an entity incorporated in Pakistan can invest in activities other than defence, space, atomic energy and other sectors where FDI is allowed, only through the government route.
The earlier FDI policy made it compulsory only for Bangladesh and Pakistan to invest via the government route. The new policy brings China, Nepal, Bhutan and Myanmar too into the ambit of the policy.
Meanwhile, Congress leader Rahul Gandhi took credit for the Centre’s announcement. “I thank the Govt. for taking note of my warning and amending the FDI norms to make it mandatory for Govt. approval in some specific cases,” Gandhi said. The Congress leader had said on April 12 that the government must not allow “foreign interests” to take control of Indian companies during the present period of “massive economic slowdown”.