Banking Lawyer's views on overseas investment by Indian corporate

by Abhinav K. Digital Marketing Expert, Freelance

We always talk about the interest of foreign investors in Indian market and of course the growth of Indian economy up to extent depends on FDI and FII, but to succeed in the long term, policy makers should also make favourable norms for Indian corporates and individual to invest in the overseas market. Indian corporates have to oblige tough policies of overseas market. In this realm, The Reserve Bank of India recently took some positive initiatives to motivate the Indian corporates. The Reserve Bank of India relaxed overseas investment by raising their borrowing limit.

According to Mr. Kislay Pandey-Banking Lawyer, the Supreme Court of India" As per the new RBI ruling, any financial commitment exceeding $1 billion in a financial year would require prior approval of the Reserve Bank even when the total financial commitment of the Indian Party is within the eligible limit under the automatic route. The financial commitment should be limited within 400 per cent compared to earlier level of 100 per cent of the net worth as per the last audited balance sheet of the company." Banking Matter Advocate

In addition, the limit of Overseas Direct Investments has been restored. Last year, RBI had reduced the ODI limit to 100 per cent of a company's net worth from 400 per cent for all companies. Public sector firms are out of this purview. According to Mr. Kislay Pandey-Banking Lawyer, the Supreme Court of India" The RBI had announced the curbs on ODI in the context of prevailing macro-economic situation.

In the last one year, there was unprecedented appreciation of dollar against rupee."

Constitutional Matters Advocate

Many Indian MNCs are expanding globally and they are complying the regulatory framework of the host countries. They often face some recurrent issues related to hefty taxes and transfer pricing. Again, each country has some different regulatory compliance rule as in the United State of America- the Dodd-Frank Act, which brought significant changes to financial regulation in the country, calls for massive compliance from financial institutions. Therefore, companies applying in the United States of America usually have to do a lot of the increased compliance work, to meet the regulatory requirements of the US. According to Mr. Kislay Pandey-Banking Lawyer, the Supreme Court of India" Whether it is US, China, countries in European Union, Russia or Brazil all have some different regulations and policies and to decrease their burden our government need to place some soft policies for the Indian corporates.