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ARTICLE · 30 JUNE 2025

Bonus Issue To Non-Resident Shareholders Permitted In FDI-Prohibited Sectors

Dewan P.N. Chopra & Co.
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The Ministry of Finance (DEA) has amended the FEMA (Non-Debt Instruments) Rules, 2019, through a notification dated June 11, 2025, effective from the date of its publication in the Official Gazette.

IndiaFinance and Banking
Dewan P.N. Chopra & Co.
Dewan P.N. Chopra & Co.

The Ministry of Finance (DEA) has amended the FEMA (Non-Debt Instruments) Rules, 2019, through a notification dated June 11, 2025, effective from the date of its publication in the Official Gazette.

As part of this amendment, a new clause has been inserted in Rule 7, allowing Indian companies operating in FDI-prohibited sectors to issue bonus shares to their existing non-resident shareholders, subject to the following conditions:

  • The shareholding pattern remains the same (i.e., no change in ownership percentage); and
  • The issuance is in compliance with applicable laws, rules, and guidelines.

This amendment aligns with the clarification earlier issued by the Ministry of Commerce & Industry vide Press Note No. 2 (2025 Series) dated April 7, 2025, modifying Para 1 of Annexure 3 of the FDI Policy dated October 15, 2020.

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