The Ministry of Finance (DEA) has amended the FEMA (Non-Debt Instruments) Rules, 2019, through a notification dated June 11, 2025, effective from the date of its publication in the Official Gazette.
As part of this amendment, a new clause has been inserted in Rule 7, allowing Indian companies operating in FDI-prohibited sectors to issue bonus shares to their existing non-resident shareholders, subject to the following conditions:
- The shareholding pattern remains the same (i.e., no change in ownership percentage); and
- The issuance is in compliance with applicable laws, rules, and guidelines.
This amendment aligns with the clarification earlier issued by the Ministry of Commerce & Industry vide Press Note No. 2 (2025 Series) dated April 7, 2025, modifying Para 1 of Annexure 3 of the FDI Policy dated October 15, 2020.
For more details, refer to the Ministry of Finance notifications:
https://egazette.gov.in/WriteReadData/2025/263729.pdf
https://dpiit.gov.in/sites/default/files/pn2_07April2025.pdf
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