The government’s move comes after the People’s Bank of China, the country’s central bank, last week raised its stake in mortgage provider HDFC from 0.8 per cent to 1.1 per cent. HDFC’s share price has fallen around 35 per cent in the wake of the Covid-19 crisis, making it an attractive investment.
Check out the expert views by Mr. Santosh Pai, Partner and Head - China Desk in the story "India’s revised FDI policy: Will tightening norms benefit or hurt the economy?"
China’s investment into India at over $8 billion outweighs investment by the other border-sharing countries combined.
Earlier this month, alarm bells went off when HDFC disclosed that the People’s Bank of China increased its stake to 1.01% from 0.8% in India’s largest private bank. Even the Indian government took notice. Soon after, the government tweaked its Foreign Direct Investment (FDI) policy to curb “opportunistic takeovers/acquisitions of Indian companies” due to the pandemic.
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From Manufacturing to Start-Ups, India’s Low Wall Against Chinese FDI Sets off Rippling Side-Effects
Industry executives and legal experts say stricter government scrutiny could delay FDI inflows, in sectors where there is no apparent national security angle, at a time when India needs it the most.
Considering the Covid-19 pandemic, the Government of India vide its Press Note No. 3 (2020 Series) issued by Department of Promotion of Industry and Internal Trade, has proposed to curb the opportunistic takeover/acquisition of Indian companies, by restricting investments in Indian companies from citizens or entities from countries sharing land borders with India only after obtaining prior Government approval. Before this Press Note, such territory-based restriction of requiring Government approval was only applicable to a citizen or entity investing from Pakistan or Bangladesh. Although the Press Note does not explicitly name any country, the intention of the Government to regulate and restrict investments from China is evident. The impact and our views on the Press Note is provided in our article below authored by Santosh Pai (Partner and Head - China Desk) and Yosham Vardhan (Associate Partner).
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Mr. Santosh Pai, Partner and Head - China Desk shares his expert views in the story "India Toughens Rules on Investments From Neighbours, Seen Aimed at China", published in The New York Times.
Check out the latest article on New FDI rules authored by our Partner, Mr. Santosh Pai published by The Hindu.
Highlights of RBI Governor’s Statement, April 17, 2020.
"An overview on General Circular No. 14/2020 dated April 8, 2020 and General Circular No. 17/2020 dated April 13, 2020 issued by Ministry of Corporate Affairs (“MCA”) on account of threat posed by Covid-19, relaxing passing of ordinary and special resolution by the companies through video conferencing or other audio visual means on or before June 30, 2020 or until further orders, whichever is earlier" - By Yosham Vardhan, Associate Partner and Ankit Agarwal, Senior Associate.
Check out the latest article on "Law of Limitation in the time of COVID-19: Interpreting the Supreme Court's March 23 order" authored by Mr. Milanka Chaudhury (Partner), Mr. Abhinav Agnihotri (Associate Partner) and Ms. Chaitra Bhat (Associate) published by Bar & Bench.
The article discusses the Supreme Court's order dated March 23, by which it had extended the limitation period for cases, in view of the Coronavirus Lockdown.
Check out the latest update by the Ministry of Corporate Affairs (“MCA”) to support and enable companies and limited liability partnerships (LLPs) in India to focus on taking necessary measures to address the COVID-19 threat, including the economic disruptions caused by it and to reduce their compliance burden and other risks by Mr. Anuj Trivedi (Partner) and Ms. Deepti Verma (Company Secretary).
