The Ministry of Finance on 17 October 2019 notified the Foreign
Exchange Management (Non-Debt Instruments) Rules, 2019 (NDI Rules)
in supersession of the Foreign Exchange Management (Transfer of
Issue of Security by a Person Resident outside India) Regulations,
2017 and the Foreign Exchange Management (Acquisition and Transfer
of Immovable Property in India) Regulations, 2018. On 27 April
2020, the Foreign Exchange Management (Non-Debt Instruments)
(Second Amendment) Rules, 2020 (Amendment) were notified by the
Ministry of Finance which amended the NDI Rules to give effect to
the following changes:
- Acquisition through rights issue:
Prior to the Amendment, the explanation to Rule 7 stated that the
conditions specified in Rule 7 are also applicable in case a
non-resident made an investment in the equity instruments (other
than share warrants) issued by an Indian company as a rights issue
that are renounced by the person to whom it was offered.
