Assistant Professor (Law),
Dharamshahtra National Law University, Jabalpur
The recent step taken by the Ministry of Finance, Government of India, is taken to keep a check on opportunistic takeover or acquisitions and clearly specifies that any Country sharing a land border with India can only invest through the Government Route. According to the press Note dated 17th April 2020, the position of Para 3.1.1 of the present consolidated FDI policy is revised. Earlier it mentioned, “A non-resident entity can invest in India, subject to the FDI Policy except in those sectors/activities which are prohibited. However, a citizen of Bangladesh or an entity incorporated in Bangladesh can invest only under the Government route. 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.” Now, it doesn’t only talks about Bangladesh and Pakistan but mentions every country sharing land borders with India will have to invest through Government Route. Also, it has been very clearly specified in the press note that in case of transfer of ownership in cases of existing or future FDI will require government approval. This press note only talks about FDI and would not be applicable to FPI. Although, SEBI has asked the custodian banks to disclose Foreign Portfolio investors based in China and Hong-Kong.
Keywords: FDI, Covid 19, Corona Virus, SEBI, DPIIT, FPI, China