IMPLEMENTATION LEVEL

National

AFFECTED FLOW

Inflow

ANNOUNCED AS TEMPORARY

No

NON-TRADE-RELATED RATIONALE

No

ELIGIBLE FIRMS

all

JUMBO

No

TARIFF PEAK

No
← back to the state act
Inception date: 21 Apr 2014 | Removal date: open ended
Still in force

FDI: Financial incentive

 On 21 April 2014, the Reserve Bank of India decided to disallow the incluson of a "non-compete clause" for Foreign Direct Investment (FDI) in the pharmaceutical sector except in special circumstances, which would require the approval from the Foreign Investment Promotion Board (FIPB) of the Government of India.
 
Non-compete clauses involve the buyer of a corporate asset seeking a binding assurance from the seller that the latter will not subsequently compete against the buyer after the transaction has been completed. Such clauses, therefore, potentially limit competition to the benefit of all incumbents, including domestic and foreign firms. The banning of these clauses, therefore, does not introduce discrimination against foreign firms per se.

AFFECTED COUNTRIES

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