UPDATES TO THE FOREIGN DIRECT INVESTMENT POLICY (India)

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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