Centre notifies rules and regulations for overseas investments; details inside
New Delhi, August 22: Union Ministry of Finance informed that the government has notified overseas investment rules and regulations in order to strengthen the country's standing in terms of ease of doing business.
Outward Investments Rules have been drafted by the Government of India in cooperation with the Reserve Bank in accordance with the amendment to the Foreign Exchange Management Act 2015.
Presently, the Foreign Exchange Management (Transfer or Issue of Any Foreign Security) Regulations, 2004 and the Foreign Exchange Management (Acquisition and Transfer of Immovable Property Outside India) Regulations, 2015 govern overseas investment by an Indian resident.
In consultation with the Reserve Bank, the Government of India undertook a comprehensive exercise to simplify these regulations. Draft Foreign Exchange Management (Overseas Investment) Rules and draft Foreign Exchange Management (Overseas Investment) Regulations were also made available for public consultation.
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Existing regulations governing Overseas Investments and the Acquisition and Transfer of Immovable Property Outside India have been included in these rules and regulations, according to a statement from the Finance Ministry.
Given the changing needs of Indian businesses in an increasingly integrated global market, Indian companies must be part of the global value chain.
The updated regulatory framework for overseas investment provides for simplification of the existing framework for overseas investment and is aligned with the current business and economic trends.
Clarity on Overseas Direct Investment and Overseas Portfolio Investment has been introduced, and several overseas investment-related transactions that were previously subject to approval are now subject to automatic approval, considerably improving the "Ease of Doing Business."
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