The change comes in the light of threat from Chinese investors to take over Indian companies. SEBI also get additional authorities to scrutinise.

20- april-2020

New Delhi: Indian government has Pluged hole in its FDI policy to control the investments coming from Chinese investors who are looking for takeover opportunities. Govt was alarmed when The people’s bank of china increased its share in HDFC bank from 0.8% to 1.01%.

China is seem to be taking advantage of the fact that Chinese economy is up and running while other countries are still locked up. Sources tell us that these investments are intended for opportunistic takeovers. Government’s move was welcomed by SEBI in regard to protecting its interests. While Beijing was not to happy with the decision and complained that India violated WTO rules of Fair world trade.

The amendment to the FDI rule states, “A non-resident entity can invest in India, subject to the FDI Policy except in those sectors/activities which are prohibited. However, an entity of a country, which shares a land border with India or where the beneficial owner of investment into India is situated in or is a citizen of any such country, can invest only under the Government route.”