ARTICLE · 29 DECEMBER 2015

Liberalisation Of FDI Policy

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The Department of Industrial Policy and Promotion ("DIPP") issued Press Note No. 12 (2015 Series) on 24 November 2015 ("Press Note"), introducing substantial changes to the Foreign Direct Investment Policy ("FDI Policy").

IndiaGovernment, Public Sector

Vaishakh Kapadia

Siddhi Ghatlia

Jenika Solanki

The Department of Industrial Policy and Promotion ("DIPP") issued Press Note No. 12 (2015 Series) on 24 November 2015 ("Press Note"), introducing substantial changes to the Foreign Direct Investment Policy ("FDI Policy"). This update sets out significant amendments brought about by the Press Note.

A. Limited Liability Partnership ("LLP")

The Press Note makes the following vital changes with respect to FDI in LLPs:

Government approval previously required for FDI in LLPs (irrespective of sector) is no longer required in sectors/activities where 100% FDI is allowed under the automatic route and there are no FDI-linked performance conditions;
Previously LLPs with FDI were prohibited from making downstream investments. Now such LLPs have been permitted to make downstream investments in another company or LLP in sectors in which 100% FDI is allowed under the automatic route and where there are no FDI-linked performance conditions.

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