Broadening the Shield: Evolution and Expansion of Press Note 3

Abstract

The Ministry of Corporate Affairs (“MCA”) has recently notified various amendments to enforce protectionist measures, which appear to resonate the objective behind the issuance of the famous (or rather, infamous) regulatory change introduced pursuant to the counter shattering effects felt by the Indian economy due to impact of COVID-19 i.e., Press Note No. 3 (2020 Series) dated April 17, 2020 by the Department for Promotion of Industry and Internal Trade (“DPIIT”), Ministry of Commerce and Industry (the “Press Note 3”) . The widely known Press Note 3, in a reactionary attempt to curb opportunist takeovers during the pandemic, had introduced a critical change to the foreign direct investment regime in India by requiring prior government approval for all foreign direct investment made by an entity of a country, which shares land border with India or where the beneficial owner of an investment into India is situated in or is a citizen of any such country. However, the ambiguity on the scope of Press Note 3, especially in light of the recent radical changes in the global geo-political and economic climate, necessitates a need to dive deeper into its continuing effect and the ramifications of such change.

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