India issues consolidated overseas investment rules to promote ease of doing business

In a bid to improve the country's position in the ease of doing business, the Union Finance Ministry on Monday notified the consolidated rules and regulations framed for the overseas investment made by Indian entities. In a statement issued by the Ministry, it said that the Outward Investments Rules have been framed by the Indian government in consultation with the Reserve Bank of India (RBI). 

"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", the statement read. 

Furthermore, it also added that the government, after consulting with the Reserve Bank, undertook a comprehensive exercise to simplify the regulations during which 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 further added. 

In addition to this, clarity has been brought over Overseas Direct Investment and Overseas Portfolio Investment and various other overseas investment-related transactions that were earlier under the approval route are now under the automatic route, thus enhancing the 'Ease of Doing Business'. 

Indian corporates need to be a part of the global value chain: Ministry of Finance 

It is pertinent to note that in view of the evolving needs of businesses in the country, in an increasingly integrated global market, there is a need for Indian corporates to be a part of the global value chain. That being said, this revised regulatory framework for Indian overseas investment will provide for the simplification of the existing framework for overseas investment and has also been aligned with the current business and economic dynamics.

Presently, 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.

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