India permits investments from land-border countries under 10% beneficial ownership cap
Change
India allowed companies with up to 10% beneficial ownership by investors from countries that share a land border with India to invest via the automatic route subject to applicable sectoral caps and required investee entities to report ownership details to the Department for Promotion of Industry and Internal Trade.
Why it matters
Control-level investments from land-border countries will continue to require prior government approval, limiting foreign acquisition of Indian firms' controlling stakes. For specified manufacturing sectors the investee must remain majority-owned and controlled by resident Indian citizens at all times, and proposals in those sectors will be processed within a 60-day window.
Implications
- • Investee entities must submit the prescribed ownership and investor information to India's Department for Promotion of Industry and Internal Trade in line with the amended guidelines.
- • Investors from countries sharing a land border with India who seek majority or controlling stakes must obtain prior government approval before completing transactions.
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Source
Topics
International Affairs Policy & Regulation Regulatory Actions Economy Manufacturing