Sensing the threat of forcible takeover of Indian companies in this crisis of Corona epidemic, the central government has tightened the FDI-Foreign Direct Investment rules. In simple words, the market value of many big and small companies has fallen due to Corona virus. In such a situation, management control can be achieved by acquiring shares in the open market. That is why the government has tightened the rules.
Rahul said Thank you to t government on tightening FDI rules
Let us tell you that recently the Central Bank of China, People’s Bank of China (PBOC) has bought 1.01 per cent stake in India’s largest housing finance company Housing Development Finance Corporation Limited (HDFC). Reactions began to pick up after this news of increasing stake in HDFC. Congress MP Rahul Gandhi had said that the economic downturn weakened many Indian corporates, so the government should take care that Indian companies cannot be controlled by foreign companies. However, he did not mention HDFC in his tweet. Now the government has announced a big change. In such a situation, Rahul Gandhi has thanked the government by tweeting.
What is new decision :
According to the new amendment, FDI investment in Indian companies from neighboring countries will now require government permission. This will apply to all countries that share land borders with China – with India. Let us tell you that similar FDI restrictions were first imposed on Pakistan and Bangladesh. According to the note issued by DPIIT, the government has changed the FDI policy to curb opportunistic acquisitions (forcible buying of the company) or acquisition of Indian companies in the current circumstances (due to COVID-19 epidemic).