DEA notifies Fema FDI easing for firms with up to 10% Chinese stake

The Finance Ministry has notified a decision to allow overseas companies with Chinese shareholding of up to 10 per cent to invest in India under the automatic route under FEMA, according to a notification. In March, the Union Cabinet approved amendments in the press note (PN) 3 of 2020 of the DPIIT. As per the amendments, foreign companies having a Chinese/Hong Kong shareholding of up to 10 per cent will be eligible to invest in India in sectors where FDI is permitted under the automatic route subject to sectoral conditions. However, these relaxed FDI rules will not apply to entities registered in China or Hong Kong or other countries sharing land borders with India. Earlier, foreign firms with shareholders from these land border nations owning even a single share had to seek mandatory approval to invest in India in any sector. Now, these restrictions will apply only to beneficial owners. After the Cabinet approval, the Department for Promotion of Industry and Internal Trade (DPI

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