Explain the reasoning in brief on the following statements: Downstream investment and Indirect Foreign Investment are different as per FEMA Guidelines. Explain.
CS Professional · Banking - Law and Practice · PYQS · December 2019
Explain the reasoning in brief on the following statements: Downstream investment and Indirect Foreign Investment are different as per FEMA Guidelines. Explain.
Answer & Explanation:
Downstream investment is investment made by an Indian entity which has total foreign investment in it or an Investment Vehicle in the capital instruments or the capital, as the case may be, of another Indian entity. If the investor company has total foreign investment in it and is not owned and not controlled by resident Indian citizens or is owned or controlled by persons resident outside India then such investment shall be 'Indirect Foreign Investment' for the investee company.
Topics: Foreign Exchange Management
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