Rebooting Land Border Investments

In 2020 in order to curb “opportunistic takeovers/acquisitions of Indian companies” due to the COVID-19 pandemic, the Indian Government through Press Note No. 3 (2020 Series) ("PN 3") required an entity of a country which shared land border with India (“LBC”) or where the beneficial owner (“BO”) of the investment in India was situated in an LBC or a citizen of an LBC, to invest through the Government route only. 

Applicability of PN 3 restrictions to LBC investors having only minority, non-strategic, non-controlling interests has been adversely affecting investment flows from investors including global funds such as private equity funds from Hong Kong and many representations have been made to the Government to relax the stringent condition of requiring prior government approval for such investments. Not only was the approval process tedious, it also substantially slowed down the investments from these jurisdictions.