India Plans Stricter Rules For Companies With Foreign Ownership
Last Updated:
The changes would redefine how India views foreign-owned firms, whether directly or indirectly, making them subject to FDI norms when it comes to share transfers or restructurings.
India is planning to tighten foreign ownership rules, two sources said, in a move that may have significant implications for businesses ranging from e-commerce to pharmaceuticals. The changes would redefine how India views foreign-owned companies, whether directly or indirectly, making them subject to foreign direct investment (FDI) regulations when it comes to share transfers or restructurings.
The discussions are close to being finalised, the sources, both government officials said. They declined to be identified as the discussion was not public.
The Finance Ministry and the Reserve Bank of India, which issues the final rules, did not respond to requests for comment.
India is reviewing its foreign investment laws to simplify them and plug any loopholes.
New Delhi plans to create a new category of 'foreign-owned and controlled entities" (FOCE), which will also include Indian firms with 'indirect foreign investment", the first source said.
'What cannot be done directly should not be allowed indirectly either. That will now be clearly reflected in the rules," the source said.
'Even a domestic restructuring or internal transfer could trigger FDI obligations for foreign-owned firms if the rule change is implemented," the source said.
An FOCE will be defined as an Indian company or investment fund that is controlled by persons resident outside India. As well as covering indirect ownership, it will also make directly owned foreign firms subject to FDI rules when it comes to changes in structure or ownership.
In particular, any transfer of the indirect shareholding will need to be reported and will have to comply with sectoral foreign investment caps.
These transactions will also be subject to rules stating they be made at fair market value.
The proposed revision in the rules aims to ensure foreign investors cannot bypass the intent of India's FDI policy, sources said.
The central bank is in agreement on the matter, the second official said.
Since 2020, India has required prior government approval for investments from nations sharing its land borders, including China, after clashes between the two neighbours in the remote Himalayan border.
The new FOCE definition will make it harder for Chinese or other foreign investors to use indirect structures such as offshore investment funds or layered Indian entities to enter regulated sectors through the back door, the second source said.
(This story has not been edited by News18 staff and is published from a syndicated news agency feed - Reuters)
First Published:
May 19, 2025, 16:59 IST
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Economic Times
9 minutes ago
- Economic Times
Employee gets appraisal after one year but gets shock of his life when he looks at his salary
A deeply disillusioned professional took to Reddit's Indian Workplace community to vent about a distressing experience that left them emotionally shattered and financially frustrated. Their warning was simple yet powerful—avoid working for family-owned businesses, particularly the kind often called " Lala companies ," where decisions are often arbitrary and heavily skewed in favor of the individual had been employed at such a firm for over a year, patiently enduring difficult circumstances with the hope that annual appraisal season might bring some reward. When the time finally arrived, the increase they received was a meager Rs 1,200. Although clearly underwhelming, they tried to find solace in the idea that any increment, however small, was still progress. They convinced themselves to stay optimistic, choosing to focus on the fact that at least their salary was technically on the what followed turned that small relief into utter disappointment. It came to light that the company had failed to deduct Provident Fund (PF) contributions for years. Instead of acknowledging their error or offering a fair solution, management decided to retroactively deduct Rs 1,800 from the employee's next paycheck to "rectify" the mistake. With the increment at Rs 1,200 and the deduction being ₹1,800, the net impact on the new salary was a decrease of Rs 600. What was supposed to be an appraisal turned into a financial setback , making the situation feel both absurd and deeply post quickly gained traction on Reddit, resonating with many others who had experienced similar forms of exploitation. Numerous users chimed in with their own horror stories and harsh critiques of such workplaces. One commenter was shocked by the insultingly low increment and urged the original poster to start searching for a new job immediately, calling such firms abusive and user shared their ordeal of being offered a job with absolutely no salary hike and even having ₹1,000 held back from each monthly payment, to be paid out only after a year. Yet another added that their current position in a mid-sized pharmaceutical company—also run in a similar family-dominated manner—was plagued by incompetent leadership. Their manager, described as toxic and intellectually lacking, maintained job security simply because of a long-standing relationship with the owner, rather than actual merit.
Hindustan Times
14 minutes ago
- Hindustan Times
'Prince William's billionaire friend': How US, UK media reported Karisma Kapoor's ex-husband Sanjay Kapur's death
To Bollywood audiences, Sunjay Kapur, who died on Thursday, may have been Karisma Kapoor's ex-husband, but to the wider international community, he was much more - an industrialist, a polo player, and a friend of royalty. The international media also reported Sunjay's death, but their focus was largely on his businesses and links to royalty, rather than the Bollywood connection. (Also read: Sunjay Kapur's funeral to be held in Delhi, but legal hurdle in getting body back to India) Sunjay Kapur died after suffering a heart attack while he was in the middle of a polo match in London on Thursday. The 53-year-old was a regular in the polo circles of the UK, which is how he came to be associated with Prince William. The Prince of Wales has been described as a friend of the late businessman. The New York Post's headline about Sunjay's death read: "Prince William's billionaire pal Sunjay Kapur dead after swallowing bee during polo match". People Magazine also focused on Sunjay's friendship with William and the bizarre reported nature of his death. "Prince William's friend dies after swallowing a bee at Windsor polo match," read their headline. The New York Times, however, highlighted his marriage to Karisma. Their headline read: "Sunjay Kapur, businessman and ex-husband of Bollywood star, dies at 53." Most British publications also mentioned Prince William in their reportage of the billionaire businessman's death. "Billionaire friend of Prince William dies from heart attack after 'swallowing a bee'," wrote the Daily Mail. Similarly, the Telegraph reported, "Billionaire friend of Prince of Wales dies after 'swallowing a bee'." Sunjay Kapur was the chairman of auto components maker Sona Comstar. After taking over as managing director of the company after his father's death in 2015, Sunjay spearheaded its expansion into China, Mexico, Serbia and the U.S. As per Bloomberg, Sona Comstar has a market cap of ₹31000 crore (nearly $4 billion). According to Forbes, Sunjay Kapur had a net worth of $1.2 billion ( ₹10300 crore) at the time of his death. The London-based Indian business tycoon had been married to Karisma Kapoor from 2003-16. The two have two children. Sunjay was previously married to fashion designer and stylist and Nandita Mahtani from 1996-2000. Since 2017, he had been married to model-turned-actor Priya Sachdev, with whom he had a son.
India Today
15 minutes ago
- India Today
Woman told to quit job for not working on projects she was never given
A Reddit post about a woman told to resign for not working on projects she was never assigned has sparked a sharp debate online, with users questioning workplace ethics and a now-viral Reddit post, a user shared the troubling experience of their friend who was abruptly asked to resign from her job, despite never being given any work in the first place. The company reportedly told her to submit her resignation by 2pm or face an automatic termination an hour graduated in 2024 and joined the company through campus placement in November. For the first six months, she underwent official training and was made a full-time employee only last month,' the post read. What followed next left her stunned.'She was never assigned to any project since training ended. Still, HR called her this morning and told her to resign because she had been on the bench for four months and lacked skills. But she was officially in training for most of that period,' the user said. The friend had been diligently attending internal upskilling sessions and never missed a single update, according to the post. With little clarity on whether to comply, escalate, or seek legal help, the user turned to the platform for guidance.'Has anyone else faced this kind of situation? What should she do now? Any legal or HR advice would be really appreciated,' the user said as they concluded their post. advertisementTake a look at the post here: The post opened the floodgates for reactions. One user urged her not to resign voluntarily. 'Let them initiate it. Gather proof of her training records and the lack of project assignments. If she resigns, compensation becomes tougher.'Another user called the move 'plainly illegal,' noting that resignation under pressure is not valid consent. 'If she wants to stay, she has every right to. Let the employer go through the official dismissal process,' the user said. Several users offered more pointed advice. 'Ask them for a proper notice period, 1 to 3 months. Don't just accept it quietly. Indian laws aren't ideal, but she should raise her voice. Also, check her employment contract. If there's no clause about termination without notice, they're in the wrong,' one of the users said. Others worried about the long-term impact. 'Won't a termination letter citing poor performance mess with her career?' a user the company's exact stance remains unknown, the post has resonated with several users who've faced similar treatment during layoffs or post-training probation. For now, the internet has come together to say one thing: being benched shouldn't mean being blindsided.
