ARTICLE · 17 APRIL 2025

Unlocking Opportunities: India's Game-Changing FDI Bonus Share Policy- DPIIT Press Note

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The Department for Promotion of Industry and Internal Trade (DPIIT) under the Ministry of Commerce and Industry, Government of India, has issued a significant clarification...

IndiaGovernment, Public Sector

The Department for Promotion of Industry and Internal Trade (DPIIT) under the Ministry of Commerce and Industry, Government of India, has issued a significant clarification regarding the issuance of bonus shares to existing non-resident shareholders by Indian companies operating in sectors where Foreign Direct Investment (FDI) is prohibited vide Press Note No. 2 (2025 Series) dated 07.04.2025 which aims to provide clarity and ensure compliance with the existing FDI policy framework.

Background of FDI Policy in India

Foreign Direct Investment (FDI) plays a crucial role in the economic development of any country by bringing in capital, technology, and expertise. India has been actively promoting FDI across various sectors to boost its economy and enhance its global competitiveness. However, certain sectors are deemed strategically important or sensitive and are thus restricted or prohibited from receiving FDI. These prohibitions are in place to protect

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