Consolidated FDI Policy, 2016 of India
Review / Changes – FDI Policy 2016: DIPP Press Note 5 of 2016
The Government of India has reviewed the extant FDI policy on various sectors vide DIPP Press Note No. 5 dt. 24 June 2016 and has made various changes / amendments in the Consolidated FDI Policy Circular of 2016 dt. 7th June, 2016 (FDI Policy), as under:
Consolidated FDI Policy, 2016 of India (Updated): DIPP Circular dt 7th June 2016
Consolidated FDI Policy Circular is a policy framework on Foreign Direct Investment which are in force. The first Circular was issued in March, 2010, which has been updated periodically. ‘Consolidated FDI Policy Circular of 2016’ is the ninth edition of the series and it subsumes and supersedes all Press Notes / Press Releases / Clarifications / Circulars, which were in force as on June 06, 2016 and reflects the Consolidated Statement of DIPP on FDI Policy of India as on June 07, 2016.
Consolidated FDI Policy Circular of 2016 incorporates all FDI policy amendments carried out since the release of last FDI Circular i.e. since May 12, 2015. FDI Policy Circular, 2016 has been made simpler and investor friendly; and will serve as a ready reference for foreign investors on various provisions of the FDI policy of India. This DIPP Circular on Consolidated FDI Policy 2016 accordingly will remain in force until superseded in totality or in part thereof.
Salient Features of Consolidated FDI Policy 2016 Circular of DIPP
1. RBI vide Notification No. 355/2015RB dated November 16, 2015 has enabled/facilitated foreign investment in Real Estate Investment Trusts (REITs) registered under SEBI (REITs) Regulation, 2014, Infrastructure Investment Trust (InvITs) registered and regulated under SEBI (InvITs) Regulation 2014 and Alternative Investment Fund (AIF) registered under SEBI (AIF) Regulations, 2012. The change has been incorporated at para 1.3;
2. Definition of “Employees’ Stock Option” has been incorporated at para 2.1.9;
3. Definition of “Investment Vehicle” has been incorporated at para 2.1.23;
4. Definition of “Sweat Equity Shares” has been incorporated at para 2.1.43;
5. Definition of “Unit” has been incorporated at para 2.1.45;
6. Clause relating to Issue of Shares Under Employees Stock Option Scheme has been amended to include issuance of Sweat Equity Shares also. (Para 5 of Annexure 4);
6. Investment Vehicle has been added as an eligible investee entity by adding new para 3.2.5;
7. FDI Policy on ‘Private Security Agencies’ has been clarified by incorporating definitions of “Private Security Agency”, “Private Security” and “Armoured Car Service” (Para 22.214.171.124);
8. Non Resident Indians have been made eligible for subscription to National Pension System governed and administered by Pension Fund Regulatory and Development Authority (Para 3.1.8).