Warrants to Foreign Investors

[Posted by Umakanth Varottil]

The Economic Times reports that there is a proposal within the Government to bring the issue of warrants by Indian companies to foreign investors within the automatic route where foreign direct investment is otherwise permitted under the automatic route.

This move, if crystallized through a formal policy pronouncement, will dispel some of the confusion that has been recently caused whereby companies are now required to obtain the approval of the Foreign Investment Promotion Board for issue of warrants though their activities are under the automatic route (for purposes of foreign investment).