ANNOUNCEMENT 23 Apr 2013In April 2013, the government of India announced changed rules for foreign investors.
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On 23 April 2013, the Reserve Bank of India (RBI) issued a notification amending the restrictions on overseas investments in the oil sector (for exploration and drilling for oil and natural gas, etc.) by Navratna Public Sector Undertakings (PSUs), ONGC (Oil and Natural Gas Corporation) Videsh Ltd (OVL) and Oil India Ltd. (OIL) which are approved by the Government of India under the automatic route, that is without requiring any permission from the RBI.
Previously, these companies were allowed to invest only in unincorporated entities in the oil sector under the automatic route, while all other investments required express permission. With this amendment, these companies are allowed to invest also in incorporated Joint Ventures and Wholly Owned Subsidiaries abroad under the automatic route.
The Navratna status is given to high performing public sector enterprises allowing them greater autonomy to compete in the global market. As a Navratna PSU, an enterprise is allowed to invest up to INR 1000 crore (appx. USD 160 million) or 15% of its net worth in a single project without seeking government approval (subject to the above condition).