Rukshad Davar’s update on protectionism published by Financial Express

by | Dec 14, 2020

Rukshad Davar, Partner & Head – M&A Practice Group, and Kritika Agarwal, Principal at Majmudar & Partners have compiled an update on the increasingly protectionist measures being taken by countries around the world and their impact on the global economy. The full update, which has been published by the Financial Express can be read here.

The COVID-19 pandemic has caused widespread economic uncertainty globally, and coupled with the US-China trade war, has caused countries to adopt protectionist measures. While the regulations introduced by India, the US, the UK, and the European Union have taken different forms, the underlying concern is uniform – save homegrown companies, especially in strategic sectors, from being acquired by state-backed investors from other countries.

India has introduced protectionist measures in two ways. One, the Indian government has launched the “Atmanirbhar Bharat” policy, which translates to “self-reliant India,” to promote local industry and reach self-sufficiency in the near future.

Second, foreign direct investments in Indian companies from border sharing countries now require prior approval of the Indian government. This requirement is applicable for direct investments, as well as investments that are beneficially held by entities or citizens of neighboring countries. This rule is primarily aimed at regulating investments from China and may also cover investments from entities based in Hong Kong and Taiwan. Further, the Indian government has not provided a de minimis threshold for beneficial ownership of, or indirect investment by, an entity or a citizen of a border sharing country. This ambiguity has led to significant uncertainty specifically in the case of acquisitions and greenfield ventures by foreign listed corporations and investment funds, whose beneficial ownership may at times not be traceable easily.

Reports also suggest that applications made to the Indian government under this new rule have not been cleared as yet, more so in light of the border tussle between India and China.

That said, the US, the European Union, and the UK already have or are looking to introduce similar protectionist measures.

More News

IBLJ A-List Rankings 2023-24

We are pleased to share that Akil Hirani, Managing Partner and Head of Transactions, Neerav Merchant, Partner and Head of Disputes, and Rukshad Davar, Partner and Head of M&A Practice, have been recognised as India's A-List lawyers for 2023-24 by India Business...

read more

Chambers and Partners 2024 Rankings

We are pleased to share that our firm has been recommended for various practice areas by Chambers and Partners in their Asia-Pacific Guide 2024. Firm Rankings Corporate/M&A: The Elite Dispute Resolution Employment Life Sciences Real Estate: Mumbai-based...

read more

IFLR1000 rankings – 2023

We are pleased to share our IFLR1000 rankings for 2023. Firm Rankings Tier 3 M&A Private Equity Project Finance Project Development: Telecommunications Networks Tier 4 Banking Capital Markets: Debt Project Development: Infrastructure Partner Rankings Akil Hirani,...

read more

Asialaw rankings – 2023

We are pleased to share that our firm has been recognised by asialaw in their 2023 rankings across multiple industry sectors and practice areas. Practice Areas: Highly Recommended: Labour and Employment Recommended: Banking and Finance, Construction, Corporate and...

read more

Asian Legal Business 2023 Rankings

Majmudar & Partners has been ranked as a Tier 1 firm in India in the Asian Legal Business M&A Rankings for Asia. Akil Hirani, Managing Partner and Head of Transactions, has been named among India's best TMT lawyers, while Rukshad Davar, Partner and Head of the...

read more