By making major changes in the rules of FDI, the Central Cabinet has given a big relief to the investment coming from cross border. After the relaxation in FDI rules, the way for investment from China has become clear. Now Chinese companies will be able to do business in the country in collaboration with Indian companies. Many companies of the country have formed joint ventures with Chinese companies. These ventures were waiting for relief in FDI rules for a long time. Let us also tell you what kind of decision has been taken by the cabinet.
The government had taken this decision in 2020
Giving information, sources said that the Cabinet Committee on Economic Affairs led by PM Modi on Tuesday relaxed the Foreign Direct Investment (FDI) rules for countries sharing land borders with India, including China. In 2020, the government changed the FDI policy for countries sharing land borders with India under Press Note 3 to prevent opportunistic takeovers or acquisitions of Indian companies due to the COVID-19 pandemic.
Notification of 2022
In a notification dated March 23, 2022, the government said that an entity from a country that shares a border with India or where the beneficial owner of an investment made in India is in or a citizen of such country, can invest only through the government route. Under the instructions issued earlier, any transfer of ownership of an existing or future FDI in an Indian entity, whether direct or indirect, resulting in beneficial ownership falling within the scope of this policy amendment, will require prior approval of the Government. The Cabinet also approved changes in the IBC Bill 2025 to ensure easier insolvency process. Sources said that changes were made in the bill after the report of the select committee. It also approved the Corporate Laws Amendment Bill.