The government has streamlined the requirements for foreign investment in order to improve the perception of ‘ease of doing business.’ It has streamlined the existing framework for overseas investment by matching it with actual company realities and providing greater clarity on offshore direct investment and offshore portfolio investment.
This was accomplished by moving numerous overseas investment-related transactions that were previously subject to clearance into the automatic route, according to a statement issued by the Finance Ministry.
“In view of the evolving needs of businesses in India, in an increasingly integrated global market, there is a need for Indian corporates to be part of the global value chain,” the statement explained the rationale behind the move.
The government launched a comprehensive exercise to streamline these regulations in cooperation with the Reserve Bank of India (RBI). The proposed Foreign Exchange Management (Overseas Investment) Rules and draft Foreign Exchange Management (Overseas Investment) Regulations were also made available for public comment.
Existing regulations governing overseas investments and the acquisition and transfer of immovable property outside India have been included into these rules and regulations, according to the statement.