MUMBAI: Spooked by Chinese companies including the country's central bank and its sovereign funds shopping in Indian stock markets, the government has dropped foreign direct investment (FDI) coming from its neighbours from the automatic approval list. The move may impact investments from countries such as Nepal, Bangladesh, Pakistan, Sri Lanka, Myanmar, and Bhutan and more importantly China. Until now, a non-resident entity or a foreign investor could invest in India, subject to FDI rules, except in sectors/activities which are prohibited. This is to prohibit particularly Chinese companies from directly or indirectly acquiring Indian companies, many of which have lost significant value due to the covid-19 crisis. Foreign investments into India come via FDI and the foreign portfolio investment (FPI) route.

Source: Mint April 18, 2020 11:15 UTC