FDI reforms raise compliance issues

Author: Brian Yap | Published: 14 Mar 2016

India has revved up its economic engines to attract more foreign direct investment (FDI) through a host of new regulatory measures, but many have created confusion over compliance.

Last November the Cabinet Committee on Economic Affairs moved to ease restrictions on foreign ownership and investment in 15 major sectors, such as defence, insurance and rail infrastructure.  

But as speakers at IFLR’s Asia M&A Forum held in Hong Kong on March 3 revealed, the new rules have received a mixed reception. 

"There are a lot of questions about what 'Indian-owned and controlled' means, with insurance companies being required to align governance arrangement to comply with foreign ownership rules," said Mohit Saraf, senior partner at Luthra & Luthra in Mumbai.

Speakers on the M&A panel argued that,...