The department of economic affairs on Friday notified amendments to the Foreign Exchange Management (Non-debt Instruments) Rules, 2019 to allow cross-border share swaps to facilitate the global expansion of Indian companies through mergers and acquisitions.
The amendments were carried out following the Union Budget announcement on simplifying rules and regulations for foreign direct investment and overseas investment.
The amendments “will facilitate the global expansion of Indian companies through mergers, acquisitions, and other strategic initiatives, enabling them to reach new markets and grow their presence worldwide,” the government said in a statement.
Another key change brings further clarity on the treatment of downstream investments made by Overseas Citizen of India (OCI)-owned entities on a non-repatriation basis, aligning it with the treatment of Non-Resident Indian (NRI)-owned entities.
Other changes include standardising the definition of ‘control’ to ensure consistency with other laws as well as enabling FDI in white label ATMs to boost financial inclusion nationwide. These amendments also harmonised the definition of “startup company”.
These amendments were aimed at creating a foreign-investor-friendly climate, with continued measures to simplify rules and promote ease of doing business.