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Foreign Direct Investment Policy : Recent Changes

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The Government of India, vide Press notes 4, 5 and 6 (2013 series), has notifiedchanges in the Foreign Direct Investment Policy, which was cleared by the Cabinet early this month. The amendments include increase in the sectoral investment limits across different sectors, easing of conditions for multi-brand retail and a more restrictive definition of ‘control’ of a company.
Following is a discussion on these Press Notes: Press Note No.4 (2013 series): Change in definition of “Control” The concept of "control" arises in several different contexts in corporate transactions. For instance, it is used to determine whether a mandatory open offer requirement arises under the SEBI Takeover Regulations. It also arises in the context of competition law, the merger control regime, and foreign direct investment (“FDI”) while dealing with the question of downstream investments by Indian companies that were owned or controlled by foreign investors, and most recently, in the Companies Act, 20…