Interviews
India releases consolidated FDI policy document
29 Oct '20
2 min read
Pic: Shutterstock
India yesterday released the consolidated foreign direct investment (FDI) policy document for 2020, after a three year gap, incorporating all recent changes. It compiles all recent decisions related to FDI in various sectors. The new circular has come into effect from October 15, the department for promotion of industry and internal trade (DPIIT) said.
The last Consolidated FDI Policy was released in 2017 and was effective from August 28, 2017.
Applications involving investments from an entity of a country, which shares a land border with India or where the beneficial owner of an investment into India is situated in or is a citizen of any such country, will need approval from the government.
“Cases pertaining to sectors/activities under government approval route requiring security clearance as per the extant Foreign Exchange Management (Non-Debt Instruments) Rules, 2019, FDI Policy and security guidelines, as amended from time to time,” DPIIT said in the document.
It has replaced the clause that said: “Applications involving investments from countries of concern which presently include Pakistan and Bangladesh, requiring security clearance” in the 2017 circular.
The circular also details the changes in FDI in e-commerce like prohibiting an entity related by equity to the e-commerce platform from doing business on the site, restricting vendors from buying more than 25 per cent of their inventory from the platform and its group companies, besides banning exclusive launches. These norms were put in place in 2018.
The 2020 consolidated circular also mandates e-commerce marketplace entities with FDI to obtain and maintain a report of statutory auditor by September 30 every year for the preceding fiscal confirming compliance of the e-commerce guidelines. This requirement was put in place in 2019.
FDI in India rose by 16 per cent year-on-year to $27.1 billion during April-August this year. The government has liberalised FDI in several sectors, including coal mining, digital news, contract manufacturing and single brand retail trading but tightened the norms for FDI coming from India’s land border sharing countries.
The last Consolidated FDI Policy was released in 2017 and was effective from August 28, 2017.
Applications involving investments from an entity of a country, which shares a land border with India or where the beneficial owner of an investment into India is situated in or is a citizen of any such country, will need approval from the government.
“Cases pertaining to sectors/activities under government approval route requiring security clearance as per the extant Foreign Exchange Management (Non-Debt Instruments) Rules, 2019, FDI Policy and security guidelines, as amended from time to time,” DPIIT said in the document.
It has replaced the clause that said: “Applications involving investments from countries of concern which presently include Pakistan and Bangladesh, requiring security clearance” in the 2017 circular.
The circular also details the changes in FDI in e-commerce like prohibiting an entity related by equity to the e-commerce platform from doing business on the site, restricting vendors from buying more than 25 per cent of their inventory from the platform and its group companies, besides banning exclusive launches. These norms were put in place in 2018.
The 2020 consolidated circular also mandates e-commerce marketplace entities with FDI to obtain and maintain a report of statutory auditor by September 30 every year for the preceding fiscal confirming compliance of the e-commerce guidelines. This requirement was put in place in 2019.
FDI in India rose by 16 per cent year-on-year to $27.1 billion during April-August this year. The government has liberalised FDI in several sectors, including coal mining, digital news, contract manufacturing and single brand retail trading but tightened the norms for FDI coming from India’s land border sharing countries.
Fibre2Fashion News Desk (DS)
Popular News
Leave your Comments
Editor’s Pick
Esteemed Clients
-Ltd..jpg?tr=w-120,h-60,c-at_max,cm-pad_resize,bg-ffffff "Thermore (Far East) Ltd.")
.jpg?tr=w-120,h-60,c-at_max,cm-pad_resize,bg-ffffff "Telangana State Industrial Infrastructure Corporation Limited (TSllC Ltd)")
.jpg?tr=w-120,h-60,c-at_max,cm-pad_resize,bg-ffffff "Taiwan Textile Federation (TTF)")
