A roadmap for phasing out of FIPB will be brought in 2017-18, Jaitley said in his budget speech on Wednesday. Consequently, except for a few sectors like defence and retail, which are under the approval route, foreign investors can invest in India under the automatic route. The government also moved to provide clarity to foreign investors from the impact of indirect transfer provisions. Jaitley said that foreign portfolio investors (under category 1 and 2 of alternative invetsment funds) are exempted from indirect transfer provisons. Application of indirect transfer provisions would have taxed any profits made by funds with underlying assets (including equities) in India.

Source: Mint February 01, 2017 07:10 UTC