In the newest edition of the Consolidated FDI Policy released, the DIPP has for the first time included a section dedicated to Indian startups. The move is part of the Indian Government’s continued push to boost venture capital investment in the fast-expanding startup ecosystem. As per the provisions in this section, startups will now be allowed to raise 100% funding from Foreign Venture Capital Investors (FVCIs) through convertible notes. The financing can also be done through the issuance of equity and debt instruments to FVCIs. Foreign investors of all countries, with the exception of Pakistan and Bangladesh, will now be permitted by law to purchase convertible notes worth $39K (Rs.25 Lakh) or more in a single tranche from startups based in India. A startup company engaged in a sector where foreign investment requires Government approval may issue convertible notes to a non-resident only with the approval of the Government. These sectors include banking, mining, defence, broadcasting, civil aviation, telecoms, and pharmaceuticals, among others. In the last three years, the government has made up to 87 alterations to FDI policies, in an attempt to accelerate economic growth and job creation. The country’s total FDI influx in FY17 stood at $60.1 billion, a jump from the $55.6 billion in the financial year ending in March 2016.

(Inc42)