ANNOUNCEMENT 21 Apr 2014

In April 2014, the government of India announced changed incentives for foreign investors entering the country.

NUMBER OF INTERVENTIONS

1

  • 0 harmful
  • 0 neutral
  • 1 liberalising

SOURCE



http://rbi.org.in/scripts/NotificationUser.aspx?Id=8845&Mode=0


Inception date: 21 Apr 2014 | Removal date: open ended

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 SECTORS

 
N/A

AFFECTED PRODUCTS

 
N/A