For example, if a Chinese company invests into an entity in another country which in turn invests in India, this is referred to as indirect investments. All such cases will now need approval by the Government for taking effect.
As per the notification, the Indian entity receiving the investment will have to report and seek approval for such investments executed overseas or indirect investments where the beneficial ownership is in the seven countries covered under the notification – China, Nepal, Pakistan, Bhutan, Bangladesh, Myanmar and Afghanistan.
The Government had earlier amended the rules pertaining to FDI norms and mandated that entities from all neighbouring nations of India will now require the approval of the Union Government before any investment into an Indian company can be materialised.
The new rules had been announced on bygone Saturday (18 April) to avoid cases where foreign entities could take up beneficial ownership of any Indian entity amid the coronavirus pandemic.
It should be noted that similar steps have also been announced by a few other nations as sentiments and concerns on possible takeover or acquisition attempts by Chinese companies surge amid the crisis.
As you are no doubt aware, Swarajya is a media product that is directly dependent on support from its readers in the form of subscriptions. We do not have the muscle and backing of a large media conglomerate nor are we playing for the large advertisement sweep-stake.
Our business model is you and your subscription. And in challenging times like these, we need your support now more than ever.
We deliver over 10 - 15 high quality articles with expert insights and views. From 7AM in the morning to 10PM late night we operate to ensure you, the reader, get to see what is just right.
Becoming a Patron or a subscriber for as little as Rs 1200/year is the best way you can support our efforts.