The change in the rule was necessary in the light of investments by foreign companies amid weak markets and company valuations. ~

New Delhi: The Government of India has amended existing consolidated FDI ( Foreign Direct Investment ) policy for curbing opportunistic takeovers/acquisition of Indian companies from neighbouring nations due to the COVID-19 pandemic, according to a notice released by the Ministry of Commerce and Industry As per the Press Note 3 issued by the Department for Promotion of Industry and Internal Trade (DPIIT) on Saturday, the government has said that an entity of a country which shares a land border with India or where the beneficial owner of investment into India is situated in any such country, can invest only after receiving government approval.The new rules will also be applicable to 'the transfer of ownership of any existing or future FDI in an entity in India, directly or indirectly, the DPIIT has said.However, the investment rules for Pakistan remain unchanged. The notification stated, "A citizen or an entity incorporated in Pakistan can invest in sectors other than defense, space, atomic, energy and sectors prohibited for foreign investment, upon government approval."The new rules will take effect from the date of FEMA (Foreign Exchange Management Act) notification, it added.The change in rule was necessary in the light of investments by foreign companies amid weak markets and company valuations. In recent times China's central bank had bought 1.01 percent stake in HDFC. News reports suggest that People's Bank of China held 1.75 crore shares of India's biggest housing mortgage lender which has raised eyebrows over the move.Also many countries have brought in legislation to save hostile takeover by Chinese companies. Australia was the first to make a move in this direction, followed by Germany and many more countries to avoid takeover of their entities by various Chinese companies scouting for transcontinental takeovers.