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New norms to ease restrictions on FDI by joint ventures of Indian companies as govt bids to revive economy

Updated : November 17, 2019 03:39 PM IST

In a bid to ease the flow of foreign funds into legitimate business activities, the government may soon ease restrictions on foreign direct investment (FDI) by joint ventures (JVs) or wholly-owned subsidiaries (WOS) of an Indian company without categorising such investments as "suspect" involving 'round tripping' of funds.
The existing legal framework under FEMA does not permit FDI by an overseas JV or WOS of an Indian party without the prior approval of the Reserve Bank of India (RBI).
The changes have become important in the backdrop of a slowing Indian economy and resultant lack of investment by the corporate sector.
New norms to ease restrictions on FDI by joint ventures of Indian companies as govt bids to revive economy
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