Published 17:30 IST, April 18th 2020
Rahul Gandhi thanks govt for 'noting his warning' after FDI policy amended for neighbours
After Centre amended India's FDI policy, former Congress chief Rahul Gandhi, on Saturday, thanked the government for taking note of the warning he had issued
After Centre amended India's FDI policy, former Congress chief Rahul Gandhi, on Saturday, thanked the government for taking note of the warning he had issued regarding 'hostile takeovers by foreign interests'. Gandhi had claimed that Indian corporates have become weak, making them attractive targets for takeovers, after China increased its stake in HDFC to 1%. He added that the government must not allow foreign interests to take control of any Indian companies during the ongoing crisis.
Rahul Gandhi: 'Thanks for noting my warning'
India amends FDI policy to protect Indian companies
Earlier in the day, Centre amended the Foreign Direct Investment (FDI) policy to ensure no hostile takeover of firms facing stress due to ongoing COVID-19 lockdown. Sources report that according to the amendment, neighbouring countries sharing land borders with India - including China, Nepal, Bangladesh, Pakistan will require government approval for investing into Indian companies. Centre has also prohibited Pakistan from investing in Indian sectors of defence, space, atomic energy and sectors/activities prohibited for foreign investment. Apart from India, EU, US, Australia have checked Chinese FDI amid COVID-19 crisis.
"Government has reviewed the FDI policy for curbing opportunistic takeovers or acquisitions of Indian companies due to the current COVID-19 pandemic,” reads the press release issued by Department for Promotion of Industry and Internal Trade (DPIIT). It adds, "A non-resident entity can invest in India, subject to the FDI Policy except in those sectors/activities which are prohibited. However, an entity of a country, which shares a land border with India or where the beneficial owner of investment into India is situated in or is a citizen of any such country, can invest only under the Government route.”
PCOB picks up 1% of HDFC Ltd.
This move occurred after People's Bank of China (PBoC) on April 12, had bought a 1% stake in India's largest housing finance lenders - HDFC Ltd. This investment amounts to 1.75 crore shares in HDFC, which has reportedly been facing a receding trend in its shares since January. Reports state that the share purchase is likely to have happened between January and March. HDFC shares closed at Rs 1,701.95 on April 10, as per market reports.
Updated 17:30 IST, April 18th 2020