iNDICA NEWS BUREAU-
To promote ease of doing business in India, the government on Monday, August 22, issued consolidated overseas investment rules which will ensure that the existing Foreign Exchange Management (Overseas Investment) Rules, 2022 will include existing regulations pertaining to Overseas Investments and Acquisition and Transfer of Immovable Property Outside India Regulations, 2015.
“In view of the evolving needs of businesses in India, in an increasingly integrated global market, there is a need for the Indian corporates to be part of the global value chain. The revised regulatory framework for overseas investment provides for simplification of the existing framework for overseas investment and has been aligned with the current business and economic dynamics,” the Ministry of Finance said in a statement issued on Monday in this regard.
The rules bring clarity to Overseas Direct Investment and Overseas Portfolio Investment and smoothen various overseas investment-related transactions that earlier needed approval, have now been put under the automatic route, which the government says, will significantly enhance “Ease of Doing Business”.
In line with the amendment in the Foreign Exchange Management Act 2015, Outward Investments Rules have been framed by the Government of India in consultation with the Reserve Bank. At present, the overseas investment by a person resident in India is governed by the Foreign Exchange Management (Transfer or Issue of Any Foreign Security) Regulations, 2004 and the Foreign Exchange Management (Acquisition and Transfer of Immovable Property Outside India) Regulations, 2015.
Last year the Government of India in consultation with the Reserve Bank had undertaken a comprehensive exercise to simplify these regulations. Following this, the Draft Foreign Exchange Management (Overseas Investment) Rules and draft Foreign Exchange Management (Overseas Investment) Regulations were also put in the public domain for consultations.
“Extant regulations pertaining to Overseas Investments and Acquisition and Transfer of Immovable Property Outside India have been subsumed within these rules and regulations,” the statement of the Ministry of Finance added.