Describe the conditions which do not require fresh approval of the Government for bringing in further foreign investment in a business entity, under Foreign Direct Investment (FDI) in India.
CS Executive · Economic, Business and Commercial Laws · PYQS · December 2022
Describe the conditions which do not require fresh approval of the Government for bringing in further foreign investment in a business entity, under Foreign Direct Investment (FDI) in India.
Answer & Explanation:
Companies may not require fresh approval of the Government for bringing in additional foreign investment into the same entity, in the following cases: Entities, the activities of which had earlier required the prior approval of the Government and which had, accordingly, earlier obtained the prior approval of the Government for their initial foreign investment but subsequently such activities/ sectors have been placed under automatic route; Entities, the activities of which had sectoral caps earlier and which had, accordingly, earlier obtained the prior approval of the Government for their initial foreign investment but subsequently such caps were removed/ increased and the activities placed under the automatic route; provided that such additional investment along with the initial/original investment does not exceed the sectoral caps; Additional foreign investment into the same entity where the prior approval of the Government had been obtained earlier for the initial/original foreign investment due to requirements of Press Note 18 of 1998 or Press Note 1 of 2005 and the prior approval of the Government under the FDI policy is not required for any other reason/purpose; and Additional foreign investment up to cumulative amount of ₹5000 crore into the same entity within an approved foreign equity percentage/or into a wholly owned subsidiary.
Topics: Foreign Direct Investment (FDI) Policy
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