Government amends FDI rules to allow NRIs to invest in India
The Union Cabinet on Thursday approved amendments to the Foreign Direct Investment (FDI) policy on investments by Non-Resident Indians (NRIs), Persons of Indian Origin (PIOs) and Overseas Citizen of India (OCIs) for greater forex remittances.
A decision in this regard was taken by the Cabinet Committee on Economic Affairs, headed by Prime Minister Narendra Modi.
The Cabinet "approved amendments to FDI policy on investments by NRIs, PIOs & OCIs. This will give PIOs & OCIs parity with NRIs in eco & edu (economy and education)," an official spokesperson said.
"The amendment in FDI for OCIs, NRIs & PIOs will lead to greater forex remittances & investment," he added.
As per the DIPP's proposal any investment made by NRIs. OCIs and PIOs from their rupee account in India, will not be treated as foreign investment.
An official said that the non-repatriable NRI funds would be treated as domestic investments.
The government wants to channelise the funds of NRIs, who now have set up large businesses abroad, by treating non-repatriable investments by NRIs as domestic investment.
The proposal was floated by the Department of Industrial Policy and Promotion to tap the NRIs for investments in defence, railways among other sectors. Last year, the government had formed a committee on this matter
Since coming to power in May last year, the Narendra Modi government has liberalised the FDI limit in crucial sectors like defence, insurance, real estate, railways and medical devices. The measures were aimed at improving India's ranking in the World Bank's Ease of Doing Business index, where India stands at 142 among 189 countries.
The measures could also be seen in the context of the Modi government allowing NRIs to vote through e-ballot system or proxy.