1 week ago
India Eases Chinese Stake Rule, Unlocking Rs 4,896-Crore FDI Pipeline
India has changed a rule for some foreign companies that have a small Chinese or Hong Kong ownership stake.
If that stake is no more than 10%, these companies may invest through a faster automatic process.
They do not need to ask the government for approval first when the investment is allowed under existing sector rules.
The companies still have to follow reporting requirements.
So far, 29 investment proposals worth nearly Rs 4,896 crore have been reported.
The proposals involve areas such as technology, artificial intelligence, medicines, factories, data centres and transport.
The investors are linked to several countries and financial jurisdictions.
The government says the change will make investing in India more predictable and reduce delays.
Twenty-nine foreign investment proposals worth Rs 4,895.65 crore have been reported under the eased rules.
Companies with up to 10% Chinese or Hong Kong shareholding can use India’s automatic FDI route.
The Finance Ministry notified the changes under FEMA on May 1.
Proposals cover information technology, artificial intelligence, manufacturing, pharmaceuticals, data centres and transport services.
Investors are based in Mauritius, the US, Korea, Japan, Singapore, Luxembourg and the Cayman Islands.
- Who
- Foreign companies with up to 10% Chinese or Hong Kong shareholding, including investors based in Mauritius, the US, Korea, Japan, Singapore, Luxembourg and the Cayman Islands.
- What
- India allowed qualifying foreign companies to invest through the automatic FDI route without prior approval, subject to sectoral conditions and reporting requirements.
- Where
- India.
- When
- The Finance Ministry notified the rule changes on May 1; 29 proposals have been reported so far.
- Why
- The government said the change would provide greater certainty, reduce transaction time and improve ease of doing business.
Key facts
- Reported proposals
- 29 FDI proposals
- Reported investment value
- Rs 4,895.65 crore
- Ownership threshold
- Up to 10% Chinese or Hong Kong shareholding
- Approval route
- Automatic route, where permitted under sectoral conditions
- Notification date
- May 1
- Covered sectors
- Information technology, artificial intelligence, information and communication, manufacturing, pharmaceuticals, data centres and transport services
- Investor jurisdictions
- Mauritius, the US, Korea, Japan, Singapore, Luxembourg and the Cayman Islands
Sources
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