Exchange management rules (foreign investments), simplified regulations

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The government has simplified the rules for investing abroad in an effort to reinforce the feeling of “ease of doing business”. Read more

New Delhi: The government has simplified the rules for investing abroad in an effort to reinforce the feeling of “ease of doing business”.

The draft Foreign Exchange Management (Foreign Investment) Rules and the draft Foreign Exchange Management (Foreign Investment) Regulations have also been released for public consultation.

It simplified the existing framework for outward investment, aligning it with current trade dynamics and introducing greater clarity on outward direct investment and outward portfolio investment.

This was done by bringing various transactions related to overseas investments, which were previously under approval, into the automatic route, according to a statement issued by the Ministry of Finance.

“Given the changing needs of businesses in India, in an increasingly integrated global market, there is a need for Indian businesses to be part of the global value chain,” the statement added while explaining the rationale for this decision.

In consultation with the Reserve Bank of India (RBI), the government has undertaken a comprehensive exercise to simplify these regulations.

Existing regulations relating to overseas investment and the acquisition and transfer of real estate outside India have been incorporated into these rules and regulations, the statement said.

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