IVCA supports regulatory consultation on draft FEMA NDI rules

The Indian Venture and Alternate Capital Association (IVCA) has expressed support for the recent stakeholder consultation regarding the draft Foreign Exchange Management (Non-Debt Instruments) Rules. The consultation involved a joint effort from the Reserve Bank of India (RBI), the Securities and Exchange Board of India (SEBI), the Department for Promotion of Industry and Internal Trade (DPIIT), and the Department of Economic Affairs (DEA).

Industry participants welcomed proposed measures intended to liberalize foreign investment and enhance the ease of doing business, specifically concerning stakes below 10% and the potential for market forces to determine valuations.

While supporting the reforms, the IVCA emphasized the need to maintain current treatments for Alternative Investment Funds (AIFs) under the IOCC framework. The association also advocated for the grandfathering of existing transactions and funds, requesting that any new regulatory provisions be applied prospectively to ensure predictability for global capital.