Arete Consultants

Country Specific Restrictions

Investment by some countries to be with Government approval post Covid19 Scenario


Any Non-resident individual (NRI)/Entity can invest subject to FDI policy (except in prohibited sectors). NRI resident in and Citizens of Nepal & Bhutan are permitted to invest on repatriation basis (amount of consideration for such investment shall be paid only by way of inward remittances through normal banking channels). In the post Covid 19 scenario to avoid predatory acquisition of Indian companies, recently the Government of India has modified the FDI policy whereby the countries sharing the land border with the country will need clearance from the Union Government of India before they invest.


A non-resident entity can invest in India, subject to the FDI Policy except in those sectors/activities which are prohibited. However, an entity of a country, which shares a land border with India or where the beneficial owner of investment into India is situated in or is a citizen of any such country, can invest only under the Government route.


The new policy is aimed to block the indirect acquisition of investments by entities based in China. Now any change in ownership of the investment will also have to be cleared by the Union government.


In the event of the transfer of ownership of any existing or future FDI in an entity in India, directly or indirectly, resulting in the beneficial ownership falling within the restriction/purview of the para 3.1.1(a), such subsequent change in beneficial ownership will also require Government approval. “FDI Policy India 2020”.