Chinese holding will need government approval, with the Centre abandoning its earlier plan to set a floor for “significant beneficial ownership”. A threshold for “significant beneficial ownership” was meant to ensure that Chinese companies did not enter India via third countries such as Singapore or Mauritius. The move is being closely watched by startups, ranging from Paytm to Zomato to BigBasket, which have Chinese investment. Several proposals are also pending government approval. Officials said they are looking to finalise guidelines in the next few days, which will also include FDI flows from Hong Kong, while Taiwanese investments are expected to be exempted from the requirement of mandatory clearance.  Separately, the government is toying with the idea of legal changes, which will be discussed at the political level to ensure that the norms are not diluted in future. This may entail amendments to the Companies Act and FEMA, which governs FDI. All FDI changes are notified under FEMA.

(Economic Times)