“We are not opposed to press notes (2,3 and 4). Earlier, we may have some opposition to some aspects of these notes. We are doing everything to implement these notes, approved by the Cabinet,” a key source said.
Earlier, the Department of Economic Affairs in the finance ministry had objected to some aspects of the new foreign investment norms, saying they rendered sectoral FDI limits meaningless.
The Department of Industrial Policy and Promotion (DIPP) under the commerce ministry issued these press notes outlining the revised FDI guidelines.
DIPP issued press notes 2 and 3, dealing with calculations of foreign investment in a company and investment in downstream entities. Since there were doubts regarding these issues, DIPP came out with press note 4. These notes have replaced the conventional proportionate method of computing foreign indirect equity by the parameter of beneficial ownership and control of entities at each stage of investment. As per press note 3, foreign investment will include all types of foreign investments — foreign direct investment, investment by FIIs, NRIs, ADRs, GDRs and convertible preference shares. This was not the case earlier.
