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FDI REFORMS

FDI REFORMS

FDI Reforms

About Foreign direct investment (FDI) The regulations for foreign investment in India have been framed by the RBI in terms of Sections 6 and 47 of FEMA, 1999. FDI is an investment from a party in 1 country into a business or corporation in another country with intention of establishing a lasting interest. RBI is the regulator but DPIIT (Ministry of Commerce & Industry) is implemented through consolidated FDI Policy. It is a source of non-debt finance for the economic development of the country. Lasting interest differentiates FDI from FPI, where investors passively hold securities from a foreign country. It can…

12 December, 2021 FDI REFORMS

RBI, IRDAI nod must for FDI in bank-led insurance

RBI, IRDAI nod must for FDI in bank-led insurance Applications for Foreign Direct Investment in an insurance company promoted by a private bank would be cleared by the RBI and IRDAI to ensure that the 74% limit of overseas investment is not breached. The changes took effect following amendments to the Foreign Exchange Management (Non-debt Instruments) Rules, 2019, as per the gazette notification issued by the Finance Ministry on August 19. “These rules may be called the Foreign Exchange Management (Non-debt Instruments) (Second Amendment) Rules, 2021,” it said. In March, Parliament passed a bill to raise the foreign direct investment…

21 August, 2021 FDI REFORMS

Insurance Amendment Bill, 2021

Insurance Amendment Bill, 2021 The government introduced a bill in Rajya Sabha to amend the Insurance Act, of 1938 and raise the foreign direct investment cap to 74% from 49%. Provisions: The Act allows foreign investors to hold up to 49% of the capital in an Indian insurance company, which must be owned and controlled by an Indian entity. The Bill increases the limit on foreign investment in an Indian insurance company from 49% to 74%, and removes restrictions on ownership and control. However, such foreign investment may be subject to additional conditions as prescribed by the central government. The…

01 April, 2021 FDI REFORMS

The Insurance (Amendment) Bill, 2021

The Insurance (Amendment) Bill, 2021 Introduction The Bill amends the Insurance Act, 1938.  The Act provides the framework for the functioning of insurance businesses and regulates the relationship between an insurer, its policyholders, its shareholders, and the regulator (the Insurance Regulatory and Development Authority of India).  The Bill seeks to increase the maximum foreign investment allowed in an Indian insurance company. Features of the Bill: Foreign investment:  The Act allows foreign investors to hold up to 49% of the capital in an Indian insurance company, which must be owned and controlled by an Indian entity.  The Bill increases the limit…

27 March, 2021 FDI REFORMS

BIT- India-Sri Lanka issues

Bilateral Investment Treaties (BIT)- India-Sri Lanka issues Introduction Sri Lanka’s decision to renege on a 2019 agreement with India and Japan that aimed to jointly develop the strategic East Container Terminal (ECT) at the Colombo port comes as a rude shock to New Delhi. India-Sri Lanka bilateral investment treaty (BIT) India-Sri Lanka bilateral investment treaty (BIT) forms the bedrock of international law governing foreign investment between the two countries. In 1997, India and Sri Lanka signed a BIT to promote and protect foreign investment in each other’s territories. Investor-state dispute settlement (ISDS): The defining characteristic of this BIT, as is…

16 February, 2021 FDI REFORMS

Analysis of 100% FDI in DTH Services

Analysis of 100% FDI in DTH services For complete news on FDI and FDI Reforms: click here Cabinet’s approval for 100% FDI for DTH (Direct to Home) television distribution sector brings a measure of calm to an industry buffeted by technological change and revenue pressures this year. Under the new norms, the licence period will go up to 20 years from the present 10, and, importantly, the fee has been reduced to 8% of Adjusted Gross Revenue, after setting off service tax, as opposed to 10% on Gross Revenue now. The proposal for a reduction in the licence fee has…

26 December, 2020 FDI REFORMS

Govt. nod mandatory for FDI from neighbouring countries - FDI Reforms

Govt. nod mandatory for FDI from neighbouring countries Part of: GS-III- Economy - FDI (PT-MAINS-PERSONALITY TEST) China’s footprint in the Indian business space has been expanding rapidly, especially since 2014. The Chinese investment in India in 2014 stood at $1.6 billion. This involved mostly investment from Chinese state-owned players in the infrastructure space in India. By 2017, the total investment had increased five-fold to at least $8 billion accompanied by a marked shift from a state-driven to market-driven approach. The report, titled “Following the Money: China Inc’s Growing Stake in India-China Relations” estimates that the total current and planned Chinese investment…

20 April, 2020 FDI REFORMS

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