The Central Government has amended the FEM (Non-Debt Instruments) Rules, 2019 to insert a proviso in Rule 6 (Investments by person resident outside India), that a Multilateral Bank or Fund of which India is a member shall not be treated as an entity of a particular country, nor shall any country be treated as the beneficial owner of the investments of such Bank or Fund in India.
Further, in Schedule 1, pertaining to sectoral caps and entry routes, the entries under Serial No. 6 (Defence) have been modified to reflect the increase in the FDI limit in defence sector to 74% under the automatic route, pursuant to Press Note 4 of 2020.
The amendments are effective from 8 December 2020.
To refer to the FEM (Non-Debt Instruments) (Fourth Amendment) Rules, 2020 dated 8 December 2020, click here.
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