Govt eases rules for share transfer between foreign players

Tribune News Service

New Delhi, May 28

Foreign investors will no longer have to seek the government’s permission to transfer shares to another overseas player in sectors where FDI is allowed under automatic route. This is aimed at improving ease of doing business and attracting foreign direct investment (FDI) into the country.

However, the government approval will be required for transfer of stake from one non-resident to another non-resident in sectors which are under government approval route, the circular added.

The measure is part of the initiatives taken by the Department of Industrial Policy and Promotion (DIPP) to clarify on certain grey areas of the FDI policy.

The circular also stated that companies won’t have to require fresh prior approval of the government to bring in additional foreign investment into the same entity within an approved foreign equity percentage or into a wholly-owned subsidiary.

Foreign investment is permitted either through automatic or government approval routes. India ranks 142 out of 189 countries on the Ease of Doing Business list. During April-February of 2014-15, FDI grew 39% year-on-year to $28.81 billion.