India permits land-border country investments with 10% non-controlling beneficial ownership
Change
India amended its foreign direct investment rules to allow entities with up to 10% beneficial ownership from countries sharing a land border to invest via the automatic route, subject to sectoral caps and mandatory reporting to the Department for Promotion of Industry and Internal Trade.
Why it matters
Any investment from a land-border country that exceeds a 10% beneficial ownership threshold or gives controlling stakes will continue to require prior government approval. For specified manufacturing sectors, the investee must retain majority ownership and control with resident Indian citizens or resident Indian entities, and proposals in those sectors will be processed within a 60-day timeframe.
Implications
- • Investee entities receiving investment with beneficial ownership from entities in countries sharing a land border with India must report the relevant beneficial ownership details to the Department for Promotion of Industry and Internal Trade.
- • Investors from countries sharing a land border with India seeking non-controlling stakes up to 10% must use the automatic FDI route and ensure compliance with applicable sectoral caps.
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Source
Topics
International Affairs Policy & Regulation Regulatory Actions