New FDI rules not for Taiwan inflows

New Delhi: Foreign direct investments from Taiwan are not covered under the latest policy changes that make prior government clearance mandatory for fund inflows from countries – including China – that share a land border with India.

Investments from Taiwan will be treated as they were previously and are excluded from the latest changes, a senior government official told ET. The FDI policy was amended on April 18, requiring all investments from countries sharing a land border with India to get prior government approval, irrespective of the sectoral cap. The prior approval is needed even when FDI from these countries is routed via entities located in other places.

The Department for Promotion of Industry and Internal Trade said the FDI policy review was aimed at “curbing opportunistic takeovers/acquisitions of Indian companies due to the current Covid-19 pandemic.”


British bank HSBC, which was established in Hong Kong and has operations in mainland China, is said to have sought legal opinion on whether India’s directive on FDI covers Taiwan, ET reported on Thursday. China treats Taiwan as a breakaway province and not as an independent nation.

India considers investments from Taiwan separately and they were never sent for security clearance.


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