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DPIIT has altered the rules of Foreign Direct Investment (FDI) in India to restrict opportunistic acquisitions of Indian comp
DPIIT has altered the rules of Foreign Direct Investment (FDI) in India to restrict opportunistic acquisitions of Indian companies and startups.

In the press note (3), authorities stated that rules were reviewed to minimize the takeovers that businesses might be possibly forced into because of the economic impact of Coronavirus Crisis.

Government Approval needed for investments!

The note released stated that

“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.”.

The new revised rules & regulations will implement directly or indirectly in case of any transfer of ownership of an already existing or future FDI in an entity in India, says DPIIT.

The sustainable flow of Revenue is crucial!

Foreign Investments are of immense importance fr India. These foreign investments require billions of Dollars for improving the infrastructure such as airports and highways. Hence, sustainable and regular revenue flow is of utmost importance in the long run.

Global concern is prompted because of the possible global recession because of the COVID-19 Pandemic. The future seems obscure for industries like IT and Services, which receive the maximum FDI. According to the government data, 18% of the FDDI funds are given to sectors including financial, banking, insurance, non-financial / business, outsourcing, R&D, etc. The IT Service sector is in second position and telecommunications sectors on the third.

Amidst the regular loss to business and startups, the fear of takeovers has made things worst. Several companies and startups are already facing difficulties in raising new funds.

The number of confirmed COVID-19 cases has crossed two million marks all across the globe. To get the latest updates on the current situation, visit the official site of WHO.

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