New FDI Road To Make In India
As a part of economic liberalization, India brought forth economic reforms during 1966 and 1985 in the crude form and 1991 in relatively refined form.
CONDITIONS FOR INVESTMENT OTHER THAN ROUTE AND CAPS
1) Entry to the investment can be through automatic route or Government route. Apart from this conditions, the new Policy require some entry condition like norms for minimum capitalization, Lock and period etc apart from other condition like to comply with all relevant sectoral laws regulation, rules security condition and state / local / laws and regulations in India.
2) Foreign investment into an Indian company which is engaged is the activity of investing in capital of other company/companies / LLP, will require prior government / FIPB approved, regardless of the amount or extent of foreign investment.
3) Those companies which are core investment companies will have to follow RBI’s Regulatory framework too.It is to be noted that Foreign Investment into other Indian Companies /LLPs would be in accordance / compliance with the relevant sectoral conditions on entry route, conditionalIties and caps.
CONDITIONS TO BE FULFILLED IN DOWN STREAM INVESTMENTS
The eligible Indian entities / LLPs need to notify SIA, DIPP and FIPB of its downstream investment along with other requirements like the resolution of Board of directors, issue / transfer / pricing / valuation of capital shall be in accordance with applicable SEBI/RBI guidelines, have to bring the fund from abroad and not the leverage find from the domestic market. This does not preclude down streams companies / LLPs from raising debt in the domestic market, eternal accruals.
—The author is Founding and Managing Partner of Anand Law Practice. He can be reached at KamalKAnand@yahoo.com, email@example.com