Earlier today, the government made its prior approval mandatory for FDI from countries that share land border with India to curb “opportunistic takeovers” of domestic firms following the COVID-19 pandemic, a move which will restrict FDI from China.
Rahul Gandhi while appreciating the government’s move tweeted, “I thank the government for taking note of my warning and amending the FDI norms to make it mandatory for government approval in some specific cases.”
I thank the Govt. for taking note of my warning and amending the FDI norms to make it mandatory for Govt. approval… https://t.co/7DYRF1yc9x
— Rahul Gandhi (@RahulGandhi) 1587210033000
On April 12, Rahul Gandhi had tweeted: “The massive economic slowdown has weakened many Indian corporates making them attractive targets for takeovers. The government must not allow foreign interests to take control of any Indian corporate at this time of national crisis.”
The Department for promotion of Industry and Internal Trade also said that the government approval will be mandatory for any transfer of ownership of any existing or future FDI in a company in India, which results in change in beneficial ownership, falling under this new restriction.
“In the event of the transfer of ownership of any existing or future FDI in an entity in India, directly or indirectly, resulting in the beneficial ownership falling within the restriction or urview of the (amended policy), such subsequent change in beneficial ownership will also require government approval,” ‘it said.
There are nine sectors where FDI is prohibited and that includes lottery business, gambling and betting, chit funds, Nidhi company, real estate business, and manufacturing of cigars, cheroots, cigarillos and cigarettes using tobacco.
During April-December 2019-20, FDI into India increased by 10 per cent to USD 36.77 billion.
(With agency inputs)