Indian Government has applied some restrictions on Foreign Direct Investment to India looking at the volatile stock market situation in India. Last week, China’s central bank had raked up 1.01% stake in HDFC taking advantage of the stock market position in India. The volatility in the banking sector could have caused some more unfair investments or hostile stake sale. The move by the Indian Government has been directly focused at Chinese companies trying to take advantage of the situation. The restriction applies to China as well as Hong Kong for any FDI coming in from companies based in these locations. Apparently China has raised a concern over the policy but it is a smart step from the Government of India to protect interests of companies based in India.
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