[The following guest post is contributed by Dhanush. M, a 5th year student at the Jindal Global Law School] `Leverage without supporting cash flows could be the death knell for the real estate industry`. The present state of the Indian real estate industry could be a testament to this adage where the total net debt of the top ten real estate firms by market capitalisation stood at Rs...
Composite Caps for Foreign Investment Formalized
We had earlier discussed the Union Cabinet’s decision to create composite caps for foreign investment under various categories. That decision has now been formalized in the form of Press Note No. 8 of 2015 issued by the Department of Industrial Policy & Promotion, Government of India (“DIPP”). In the previous post, we had highlighted two outstanding issues from the Cabinet decision that were...
Participatory Notes
[The following guest post is contributed by Rishi A, a fourth year student of Hidayatullah National Law University] Introduction The Supreme Court appointed Special Investigations Team (“SIT”), in its report on how best to curb black money, made a number of recommendations. One of these was to check the misuse of participatory notes (“p-notes”). When the markets opened on the following...
Composite Caps for Foreign Investment
Although liberalized over time, caps on foreign investments in select sectors have been a hallmark of India’s foreign investment policy. Added to this is the prescription of “sub-limits” for specific types of foreign investment such as foreign portfolio investment (FPI) and foreign direct investment (FDI). Currently, in several sectors there are different caps for FPI and FDI. For example, in the...
Lack of Regulatory Clarity on Foreign Investment in the Insurance Sector
[The following guest post is contributed by Nivedita Shankar, Senior Associate, Corporate Law Division, Vinod Kothari & Company. The author may be reached at [email protected]]. An increase in the threshold limit for foreign investment in insurance companies has been hailed as a major thrust for the insurance sector, which has seen very few players. In this background, the Indian...
DIPP Clarification on NRI Investments
[The following guest post is contributed by Dipanjali Nagpal of Vinod Kothari & Co. The author may be contacted at [email protected]. This post follows upon an earlier more brief post on the topic.] The Department of Industrial Policy and Promotion (DIPP), Ministry of Commerce and Industry, Government of India reviewed the Consolidated Foreign Direct Investment (FDI) Policy Circular of...
The Applicability of Minimum Alternate Tax to Foreign Investors
[The following guest post is contributed by Abhik Chakraborty, who is a 4th year student at NUJS, Kolkata] The Supreme Court in Ajanta Pharma Ltd. V. Commissioner of Income Tax-9, Mumbai [1] has clarified that the intent with which the provision related to minimum alternate tax (MAT)[2] was inserted in 1996 was to ensure that zero tax companies[3] pay at least a minimum amount of tax on their...
Liberalization of Investments by Non-Resident Indians
Non-resident Indians (NRIs) have long been considered as a separate category of investors who have enjoyed some privileges compared to other classes of foreign investors. NRIs have been allowed to investment either on a repatriable basis (with more stringent norms) and on a non-repatriable basis (with less stringent norms). Earlier this week, by way of Press Note No. 7 (2015 Series), the...
Bombay High Court Pronounces on FDI Policy
It is not very often that courts in India have had the occasion to interpret and rule on the Foreign Direct Investment (FDI) Policy of the Government of India. Earlier this month, the Bombay High Court issued its ruling in IDBI Trusteeship Services Ltd. v. Hubtown Ltd., which relates to the legalities of a foreign investment structure that involved compulsory convertible debentures (CCDs) issued...
Consolidated FDI Policy Circular of 2015
The Department of Industrial Policy
and Promotion (DIPP), Ministry of Commerce and Industry has issued its annual FDI Policy
Circular for 2015, which takes effect from May 12, 2015. Although the
circular essentially consolidates all the changes made to the policy during the
previous year, there are some further changes that are discussed in this EY
Regulatory Alert (via The Firm).
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