India Proposes New FDI Rules for Joint Ventures

Indian authorities are reconsidering rules on foreign direct investment for joint ventures in an effort to increase the inflow of new investment in the country.

Currently, foreign investors who entered joint ventures in India before January 12, 2005 are required to seek prior government approval and prove that the new infusion of investment in the field would not affect the local joint venture partner.

The Industry Ministry is proposing that foreign investors be allowed to bring in fresh money and technology, regardless of whether it will affect its current local joint venture partner.

The Department of Industrial Policy and Promotion (DIPP) has already issued a discussion paper on the possible changes that could be made on the 12 year rule.

The DIPP said: “There is a need to examine whether such a ‘condition’ continues to be relevant in the present day context. It has invited comments from the stakeholders till October 15.”

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