On 02nd January, 2017, RBI in exercise of powers conferred under section 47 of the Foreign Exchange Management Act, 1999, inserted the following after Clause (vi), sub regulation (2) of Regulation 6 of Foreign Exchange Management (Transfer or Issue of Any Foreign Security) Regulations, 2004:
“(vii) Indian Party shall make no direct investment in an overseas entity [set up or acquired abroad directly as JV/WOS or indirectly as Step Down Subsidiary] located in the countries identified by the Financial Action Task Force (FATF) as “non co-operative countries and territories” as per list available on FATF website www.fatf-gafi.org or as notified by the Reserve Bank of India from time to time.”