Foreign Direct Investment by citizen / entity incorporated in Pakistan
IN terms of sub-regulation (1) of Regulation 5 of the Foreign Exchange Management (Transfer or Issue of Security by a Person Resident outside India) Regulations, 2000 , a person resident outside India who is a citizen of Pakistan or an entity incorporated outside India in Pakistan, is not allowed to purchase shares or convertible debentures of an Indian company under Foreign Direct Investment Scheme.
It has now been decided that notwithstanding anything contained in sub-regulation (1) of Regulation 5, a person who is a citizen of Pakistan or an entity incorporated in Pakistan may, with the prior approval of the Foreign Investment Promotion Board of the Government of India, purchase shares and convertible debentures of an Indian company under Foreign Direct Investment Scheme, subject to the terms and conditions specified in Schedule 1, provided further that the Indian company, receiving such foreign direct investment, is not engaged or shall not engage in sectors / activities pertaining to defence, space and atomic energy and sectors/activities prohibited for foreign investment.
RBI AP(DIR Series) Circular No. 16Dated: August 22, 2012