India may reduce scrutiny of deals by Hong Kong-based investors as long as Chinese firms aren’t involved in the transactions, people with knowledge of the matter said.
The proposals under consideration include making it mandatory for beneficial owners from nations sharing a land border with India to seek the government’s permission to acquire more than 10% stake in any local firm, the people said, asking not to be identified citing rules. The discussions are at a preliminary stage, they said.
Prime Minister Narendra Modi’s administration is formalizing investment rules for neighboring countries amid a bloody border standoff with China earlier this year. That’s led to over 140 proposals worth more than $1.75 billion, including proposals from China and Hong Kong, getting delayed and complicating deal-making for investors.
The framework is expected to speed up the approval process and bring in much-needed clarity for both private equity firms and hedge funds and companies looking for foreign capital as they struggle amid the pandemic-generated economic shocks.
A call made to the trade and industry ministry spokesman was not immediately answered.
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