Eons ago, an English judge remarked that “public policy” is an unruly horse and once you get astride it you will never know where it will carry you. Lately, corporate India has been left to contend with another unruly horse in the form of the concept of “control”, whose scope and meaning have been stretched in different directions without the requisite precision, often altering according to time...
Approval of New FDI Norms; Impact on Multi-brand Retail
In an earlier post, we had discussed the relaxation measures approved by the Union Cabinet for increase in the foreign direct investment (FDI) in certain sectors. Now, the specific changes to the FDI Policy Circular of 2013 have issued. The changes to the FDI caps and routes are available on the website of the Press Information Bureau (PIB) (under releases issued on August 1, 2013). Separately...
Another Round of FDI Reforms
The Government seems to be facing a somewhat similar situation that it faced way back in 1991 when it launched big bang reforms for liberalization of the Indian economy. With slowing growth rates and a sliding Rupee, the Government seems compelled to take immediate measures. One such set of measures relates to reforms that help attract greater flow of foreign direct investment (FDI) into the...
Committee Report on Foreign Portfolio Investments
In mid-June, SEBI had announced the submission of a report by the Committee on Rationalization of Investment Routes and Monitoring of Foreign Portfolio Investments under the chairmanship of Mr. K.M. Chandrasekhar. The full report in now available online. The key recommendations of the committee are to combine the erstwhile portfolio investment categories of foreign institutional investors (FIIs)...
Changes in the Revised FDI Policy of 2013
[In a previous post, we had drawn attention to the Revised FDI Policy. One of the criticisms of the policy review process was that the changes were not evident from the face of the policy, thereby making it less user-friendly. Fortunately, this gap has been filled in a timely manner by one of our guest contributors below. The following post is contributed by Parag Bhide, who is a Senior Associate...
Foreign Investment in Debt Securities: Rationalization of Limits
With effect from April 1, 2013, the Government has rationalized the investment limits in debt securities for foreign institutional investors (FIIs) and other eligible investors such as qualified foreign investors, sovereign wealth funds, pension funds and the like. This has been implemented through circulars issued by SEBI (here) and RBI (here). Previously, FII investment in debt (both Government...
Revised FDI Policy Issued
The Department of Industrial Policy & Promotion, Government of India has issued the revised Consolidated FDI Policy by way of Circular 1 of 2013, which came into effect on April 1, 2013. This is pursuant to the Government’s policy adopted a couple of years ago to update the FDI policy periodically (now annually) such that it is available on a consolidated basis. The new policy incorporates...
DGCA Guidelines for FDI in Civil Aviation Sector
The foreign direct investment (FDI) regime in the civil aviation sector has been progressively liberalized over a period of time. The latest round was effected in by the Department of Industrial Policy & Promotion, Government of India in September 2012 by which foreign airlines are now allowed to invest in the Indian civil aviation sector up to a limit of 49% under the Government approval...
Budget 2013: Foreign Portfolio Investment
The Finance Minister has sought to streamline the currently complex regime for foreign portfolio investment. The Budget speech notes: – There are many categories of foreign portfolio investors such as FIIs, sub-accounts, QFIs etc. and there are also different avenues and procedures for them. Designated depository participants, authorised by SEBI, will now be free to register different...
The Exportation of Indian Capital Markets
Reuters has a report indicating that the volume of trading in Indian derivatives in the Singapore market is almost as robust as that in the Indian market. This suggests that the Indian capital markets are being exported overseas. Investors are able to enjoy the investment benefits in Indian underlying assets or investments without actually investing in India. Usually, this phenomenon occurs for...
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