Pursuant to business interference and falling stock prices on account of Covid-19 pandemic, the government of India has revised the Foreign Direct Investment policy while primarily aimed at restricting foreign investments especially from China and other neighbouring countries.
Present FDI circular has permitted to invest only under Government approval route to the countries, which share a land border with India i.e. China, Pakistan, Bangladesh, Nepal, Myanmar, Bhutan, and Afghanistan. Further, the present rules are applicable for both fresh, and existing FDI as well. Transfer of ownership of any existing or future FDI where the direct or indirect beneficiary is from these countries will also require government approval. The government will need to issue certain clarifications for existing investments from restricted countries. This restriction will also apply if the beneficial owner of the investment is an entity situated in or a citizen of such countries. FDI Circular 2020