Centre Subtly Changes Overseas Investment Rules, Sharp Focus on Defaulters

In an announcement released on Monday, the Finance Ministry incorporated the existing Overseas Investments and Acquisition and Transfer of Immovable Property Outside India Regulations, 2015 into its Foreign Exchange Management (Overseas Investment) Rules, 2022.

According to the new rules, any Indian resident with an account that appears to be non-performing; is a wilful defaulter by any bank; or is under investigation by an Indian financial regulator or by an Indian investigative agency, will have to obtain a "no objection certificate" before making any overseas financial commitment. This has been done to keep a keen eye on defaulters.

Additionally, the revised overseas investment rules provide much-needed clarity regarding Indian entities' debt and financial commitments to foreign companies. Furthermore, the revised guidelines simplify the investment process for Indian businesses and individuals abroad.