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ARTICLE · 21 AUGUST 2024

Foreign Exchange Management (Non-Debt Instruments) (Fourth Amendment) Rules, 2024

Obhan Mason
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Earlier this year, the Union Minister for Finance and Corporate Affairs, Smt. Nirmala Sitharaman, in her budget speech announced the intent to simplify the regulatory framework governing...

IndiaCorporate/Commercial Law
Ashima Obhan
Ashima Obhan
Vrinda Patodia
Vrinda Patodia
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Background

Earlier this year, the Union Minister for Finance and Corporate Affairs, Smt. Nirmala Sitharaman, in her budget speech announced the intent to simplify the regulatory framework governing Foreign Direct Investments ("FDI") and Overseas Investments ("OI"). Subsequently, through a recent notification dated August 16, 2024, the Ministry of Finance amended the Foreign Exchange Management (Non-debt Instruments) Rules, 2019 ("NDI Rules") vide the Foreign Exchange Management (Non-debt Instruments) (Fourth Amendment) Rules, 2024 ("Amendment Rules").

The principal objective of the Amendment Rules is to simplify cross-border equity share swaps and provide for the issue/transfer of equity instruments of Indian companies in exchange for the equity instruments of foreign companies. Other changes under the purview of the Amendment Rules include amending the definitions of 'start-ups' and 'control' to align them with the definitions under other laws, and permitting

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