Many European countries too have tightened FDI norms to prevent Chinese firms from taking over their companies
New Delhi [India], Apr 18 (ANI): The government has introduced stricter measures to curb opportunistic takeover of Indian companies due to the current COVID-19 pandemic by firms in neighbouring countries.
Earlier this week, several west European countries including Germany, Italy and Spain tightened their foreign direct investment (FDI) rules to prevent Chinese firms from taking over their companies which are facing slumping sales due to coronavirus pandemic.
According to a statement issued by the Department for Promotion of Industry and Internal Trade (DPIIT ), the government said that an entity of a country which shares a land border with India can invest only after receiving government approval.
“However, an entity of a country, which shares a land border with India or where the beneficial owner of investment into India is situated in or is a citizen of any such country, can invest only under the government route,” said the statement.
The new rules will also apply to the transfer of ownership of any existing or future FDI in an entity in India directly or indirectly, the DPIIT said. On the other hand, the already tight rules for citizens of Pakistan remain the same, and sectors such as defence, space, atomic energy and sectors continue to remain prohibited to them, it said.
Rahul Gandhi thanks Centre for taking note of his warning, amending FDI norms
Congress leader Rahul Gandhion Saturday thanked the Centre for amending the FDI norms to make government approval mandatory in some specific cases such as relating to an entity of a country which shares a land border with India.
“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 in a tweet. With an eye on China, the government has introduced stricter measures to prevent opportunistic takeover of Indian companies due to the situation created by COVID-19.
Earlier, in a tweet on April 12, Gandhi had referred to crisis created by coronavirus and said the government must not allow foreign interests to take control of any Indian corporate.
“The massive economic slowdown has weakened many Indian corporates making them attractive targets for takeovers. The Govt must not allow foreign interests to take control of any Indian corporate at this time of national crisis,” he had said.
A statement issued by the Department for Promotion of Industry and Internal Trade (DPIIT) said that an entity of a country which shares a land border with India can invest only after receiving government approval.
“An entity of a country, which shares a land border with India or where the beneficial owner of investment into India is situated in or is a citizen of any such country, can invest only under the government route,” it said.
The new rules will also apply to the transfer of ownership of any existing or future FDI in an entity in India directly or indirectly, the DPIIT said. (ANI) (ANI)
