Corporate Advisory – Amendments To The Indian Exchange Control Regulations

The Ministry of Finance (Department of Economic Affairs), on August 16, 2024, notified the Foreign Exchange Management (Non-debt Instruments) (Fourth Amendment) Rules, 2024 (“Amendment Rules”), to bring about key amendments to the Foreign Exchange Management (Non-debt Instruments) Rules, 2019 (“NDI Rules”). In this article, we have explained, in brief, the changes implemented to the NDI Rules vide the Amendment Rules.

1. CHANGES IN THE DEFINITIONS IN THE NDI RULES:

• Control:
  
  Previously, the definition of “control” under the NDI Rules was included only in the specific provisions where the term “control” was used (for example – in the provisions relating to downstream investments, and in the provisions relating to foreign portfolio investments), and there was no common definition of “control”. The Amendment Rules have deleted the usage of the term “control” in the specific provisions of the NDI Rules and introduced a new umbrella definition of “control”.