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October 2013

A. P. (DIR Series) Circular No. 44 dated 13th September, 2013

By Gaurang Gandhi, Chartered Accountant
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Notification No. FEMA. 285/2013-RB dated 30th August, 2013 vide G.S.R. No.597 (E)

Foreign Direct Investment (FDI) in India–Review of FDI policy–definition for control and sector specific conditions

This circular contains the following information:

1. Revised definition of the term ‘control’—’Control’ shall include the right to appoint a majority of the directors or to control the management or policy decisions including by virtue of their shareholding or management rights or shareholders agreements or voting agreements.

2. The State Governments of Himachal Pradesh and Karnataka have given consent to implement the FDI policy on Multi-Brand Retail Trading in Himachal Pradesh and Karnataka respectively. As a result the list of States stands modified with the addition of the names of the above two States.

3. The Central Government has issued the new Consolidated FDI Policy which has come into effect from 5th April, 2013. The RBI has accordingly revised and updated the FDI caps and routes for various sectors in order to bring the same in uniformity with the sectoral classification for FDI as notified under the Consolidated FDI Policy Circular.

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