Boosting Investment
Govt amends FEMA to simplify FDI investment rules
This story was originally published at 23:16 IST on 16 August 2024
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NEW DELHI – The government has amended the Foreign Exchange Management (Non-debt Instruments) Rules, 2019, in a bid to simplify cross-border share swaps and provide for the issue or transfer of Indian company equity instruments in exchange for foreign company equity instruments, the finance ministry said in a notification today.
"This will facilitate the global expansion of Indian companies through mergers, acquisitions, and other strategic initiatives, enabling them to reach new markets and grow their presence worldwide," the ministry said in a release.
Finance Minister Nirmala Sitharaman announced in the Union Budget for 2024-25 (Apr-Mar) that the government will simplify rules and regulations for foreign direct investment and overseas investment to promote opportunities for using the Indian rupee as a currency for overseas investments.
The government has also aligned the treatment of downstream investments made by entities owned by an overseas citizen of India on a non-repatriation basis with the treatment of Non-Resident Indian-owned entities.
Further, the government has enabled 100% foreign direct investment in white label automated teller machines, or ATMs, to boost financial inclusion. Other changes included standardising the definition of 'control' to ensure consistency with other Acts and laws.
"These amendments underscore the Government's commitment to creating a foreign-investor-friendly climate, with continued measures to simplify rules and promote Ease of Doing Business," the ministry said. End
Reported by Shubham Rana
Edited by Deepshikha Bhardwaj
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