ANNOUNCEMENT 22 Aug 2012In August 2012, the government of India announced changed incentives for foreign investors entering the country.
NUMBER OF INTERVENTIONS
On 22 August 2012, the Reserve Bank of India amended an earlier notification on the transfer or issue of a security by a person resident outside India. The amendment allows Pakistani citizens and entities to invest in shares and convertible debentures of Indian companies.
Previously, all citizens (except citizens from Bangladesh, Sri Lanka or Pakistan) and all entities (except entities from Bangladesh or Pakistan) were allowed to purchase shares or covertible debentures of an Indian company under the Foreign Direct Investment Scheme, subject to specified conditions.
Thus, the amendment allows Pakistani citizens and entities to make such investments provided that they get prior approval of the Foreign Investment Promotion Board of the Government of India, fulfill the specified conditions and provided that such investment is and shall not be engaged in sectors/activities pertaining to defence, space and atomic energy and other sectors/activities prohibited for foreign investment.