India – Press Note 3 Update

A recent press report suggests that the Indian government is likely to clear joint venture proposals involving Chinese companies like Haier, Suzhou Innovance, China Highly Group and others where the Indian partner has a majority shareholding in the joint venture.

In April 2020, the Indian government issued Press Note 3 (PN3) under which prior government approval was made mandatory for all direct or indirect investments coming into India from countries sharing a land border with India (including China). PN3, thus, made it very difficult for Chinese investors to invest in India, and it also impacted foreign investors having Chinese/ Hong Kong funds or other Chinese owners in their cap table.