[The following guest post is contributed by Swati Rampuria at Vinod Kothari & Co. She can be contacted at [email protected]] Introduction The Foreign Contribution (Regulation) Act, 2010 (‘FCRA’), regulates the receipt and utilization of foreign contribution by certain persons and also disallows acceptance and utilization of foreign contribution for certain activities. Being a special...
DIPP Operationalizes Insurance FDI Reforms
The Government had earlier begun the process of enhancing foreign direct investment (FDI) in the insurance sector by increasing the investment cap from 26% to 49%. Given the political stalemate in the Parliament’s legislative process, the Government had initiated the reforms in December 2014 through the promulgation of the Insurance Laws (Amendment) Ordinance, 2014. Subsequently, the Finance...
Budget 2015: Foreign Investment
Given the economic orientation of the new government, one would expect that the Budget would make wholesale relaxations to the foreign investment policy and open up or further liberalise various sectors. But, anyone adopting that tack is bound to be disappointed as the Budget makes minimal changes regarding foreign investment. First, the vehicle of alternative investment funds receives a boost as...
Budget 2015: Financial Markets
The Budget makes some proposals to boost the financial markets in India, both in the debt and equity segments, but arguably the reforms are only incremental and many not necessary result in drastic expansion of the markets. Corporate Bonds The first proposal is to give a fillip to the bond markets. As a co-author and I have observed in an earlier paper, the equity markets in India have developed...
Budget 2015: Ease of Doing Business
The Government’s focus on enhancing the ease of doing business in India is abundantly evident from the Budget. This involves not only issues of licensing and approvals, but also matters for legal reform. In this post, I argue that while the proposals in the Budget will certainly help grow industry and foreign investment, many of these measures appear to correlate precisely with the need to...
Budget 2015: Some Preliminary Thoughts
The Finance Minister today announced India’s Budget 2015-2016. The Budget documents, including his speech are available here. It is significant that this Budget comes during a period of upturn in the economy after a few preceding years of perceived gloom and doom, especially from the perspective of foreign investors. Other features attributable to the current macroeconomic environment include...
Pricing of Options To Foreign Investors
The last few weeks have witnessed some activity from the Reserve Bank of India (RBI), which is indicative of a more liberalized approach towards the pricing at which foreign investors are able to sell their shares upon exercise of options (such as put options) made available to them under contractual documentation. Most of the indications came from the RBI in relation to a specific case involving...
Revised FDI Norms for Construction Notified
Last month, we had carried a guest
post summarising and commenting upon the changes to the FDI norms in the
construction industry, which relaxed several conditions. Now the Department of
Industrial Policy and Promotion (DIPP) has made these changes effective in the
form of Press
Note No. 10 (2014 Series).
Tighter Restrictions on Offshore Derivative Instruments
The issue of offshore derivative instruments (ODIs) such as participatory notes (PNs) have been the subject matter of regulatory controversy for some time now. These are instruments issued by foreign institutional investors (FIIs) (now foreign portfolio investors (FPIs)) to investors overseas that mimic the risks and rewards on underlying securities held by the FIIs/FPIs in Indian companies...
Indian Companies Issuing Securities Overseas
Historically, Indian companies have issued equity instruments in the form of depository receipts (either American depository receipts (ADRs) or global depository receipts (GDRs)) or convertible debt instruments in the form of foreign currency convertible bonds (FCCBs). Of late, such overseas securities issuances have reduced quite significantly. Now, the Government has revamped the legal regime...
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