[The following post is contributed by Amitabh Robin Singh, who is a corporate lawyer practising in Mumbai.] Last month, the Reserve Bank of India (“RBI“) allowed Foreign Portfolio Investors (“FPIs“) to invest in unlisted non-convertible debentures (“NCDs“). This has been done by way of an amendment to the Foreign Exchange Management (Transfer or Issue of...
Foreign Investments in Category III Alternative Investment Funds
[The following guest post is contributed by Kemi Gupta, who is a 5th year B.A., LL.B (Hons.) student at NALSAR University of Law] In a matter of only a few years,[1] India’s alternative investment industry has grown to Rs. 20,700 crore in size,[2] and is yet claimed to be in its early stages. Alternative investment funds (“AIFs”) constitute any privately pooled investment...
Liberalization of RBI’s Policies
The Reserve Bank of India (RBI) last week issued a series of circulars liberalizing and streamlining its policies on various types of equity investments as well as on external commercial borrowings (ECBs). The key pronouncements are highlighted below: 1. Foreign Investment in “Other Financial Services” In the case of non-banking finance companies...
An Update on the FDI Reforms
[The following guest post is contributed by Bhushan Shah and Neha Lakshman of Mansukhlal Hiralal & Company. The views expressed are personal.] After significant changes in the Foreign Direct Investment (FDI) policy in November 2015, the Union Government through Press Note No. 5 (2016 Series) issued on 24 June 2016[1] announced further important changes to the FDI Policy. Changes introduced in...
Easy-commerce?
[The following guest post is contributed by Arup Pereira, who is a Principal Associate at J. Sagar Associates, Mumbai] The Government’s foreign direct investment (“FDI”) policy on retail trading in India encourages foreign companies and Indian companies with foreign investment to “Make in India”. At present, FDI is not permitted in an Indian company engaging in business to consumer (“B2C”) e...
RBI Permits Deferment of Consideration and Escrow Mechanism Under Automatic Route
[The following post is contributed by Abhishek Dubey who is a Managing Associate with BMR Legal, Delhi. The views expressed here are personal.] In continuation of its policy to rationalize the existing regime under the Foreign Exchange Management Act and to promote the ease of doing business, the Reserve Bank of India (RBI) has amended the Foreign Exchange Management (Transfer or Issue of...
Some Ambiguities in the Rules on Downstream Investments
[The following guest post is contributed by Ajay G. Prasad, who is a Senior Associate with Kochhar & Co, Bangalore. Views expressed in this post are personal and do not reflect the views of the firm.] Exchange control rules on downstream investment form an important aspect to consider in M&A transactions. As per the foreign direct investment policy (“FDI Policy”) of the Department of...
A Move Towards “Pool in India”; However, Room for More Reforms Exists!
[The following post is contributed by Yashesh Ashar, who is a tax and regulatory consultant. Views expressed are personal.] The Finance Bill, 2016 has given in to the much sought-after demand of the domestic private equity (PE) industry by amending the provisions relating to the tax withholding obligations for the category I and category II alternative investment funds (‘AIFs’) registered with...
Press Note 3 of 2016: ‘Old wine in a new bottle’?
Press Note 3 of 2016 issued by the Department of Industrial Policy and Promotion (DIPP) has had a mixed reception – e-commerce companies have largely remained silent, while some ‘brick and mortar’ retailers have welcomed the prohibition on influencing the price of goods amongst others. We believe that pending litigation and consultations with stakeholders have led the Government to issue the...
FDI Reforms in E-Commerce: What Do They Entail?
In a post on this Blog earlier this month, Satyajit Gupta and Saurabh Sharma elaborately discussed the background to the foreign direct investment (FDI) policy in the e-commerce sector. Ambiguities in the policy have not only given rise to uncertainties to players in the sector, but have also resulted in multiple rounds of litigation. As they demonstrate, the dominant e-tailers have gravitated...
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