The government has set up a panel to evaluate and approve Chinese foreign investment proposals. The government had amended the Foreign Direct Investment (FDI) policy in April to discourage "opportunistic investment" in Indian companies amid the novel coronavirus pandemic.
Proposals screened by the panel and considered "non-controversial" could be approved, The Economic Times reported, quoting a senior government official.
As per the amended policy, FDI investments into Indian companies from the neighbouring countries that share a land border with India will now require a nod from the government. This was widely seen to be directed at curbing Chinese takeovers of Indian companies during the pandemic.
Read: New FDI rules bar automatic investments by neighbouring countries in policy targeted at China
Home Secretary will head the screening panel, which also comprises the Department for Promotion of Industry and Internal Trade (DPIIT) secretary, the report stated.
"An inter-ministerial committee has been set up to look at the proposals that various ministries had received that were forwarded to the home ministry for security clearance," the official told the newspaper.
As per the report, over 100 proposals involving foreign direct investment (FDI) from China are currently pending.
Moneycontrol could not independently verify the report.
DPIIT had notified the new FDI policy on April 18. The note states: “An entity of a country, which shares a land border with India or where the beneficial owner of investment into India is situated in or is a citizen of any such country, can invest only under the Government route.”
This was aimed at "curbing opportunistic takeovers/acquisitions of Indian companies due to the COVID-19 pandemic."
The amendment specifies that transfer of ownership of Indian companies arising out of FDI investments from neighbouring countries will also be subject to government approval.
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