Press Note 3 of 2020

Press Note 3 (2020), issued by the Department for Promotion of Industry and Internal Trade (DPIIT) on April 17, 2020, amended India's consolidated FDI policy to require prior government approval for any investment from an entity situated in, or whose beneficial owner is a citizen of, a country sharing a land border with India. The measure was introduced as a safeguard against opportunistic takeovers of Indian companies during the COVID-19 pandemic, when valuations were depressed. Seven countries are covered: China (including Hong Kong), Pakistan, Bangladesh, Nepal, Bhutan, Myanmar, and Afghanistan. Prior to PN3, investments from these countries could flow under the automatic route (no government approval needed) except in a few sensitive sectors.