The Government of India has recently amended its Foreign Direct
Investment Policy ("FDI Policy") and
barred automatic investment into India by its neighbouring
countries. A press release1 dated April 17th,
2020, ("Press Release") issued by the
Department for Promotion of Industry and Internal Trade (DPIIT) has
revised the FDI Policy to curb opportunistic takeovers or
acquisitions of Indian companies in the aftermath of the novel
coronavirus outbreak and the looming economic crisis.
Present Position
Prior to the amendment, a non-resident entity could invest in
India, subject to the FDI Policy except in certain reserved
sectors. However, a citizen of Bangladesh or an entity incorporated
in Bangladesh could invest only under the Government route. Whereas
a citizen of Pakistan or an entity incorporated in Pakistan could
invest in India, but only with prior Government approval in sectors
excluding defence, space, atomic energy or any other sensitive/
prohibited sectors.
