Government of India

Ministry of Commerce & Industry

Department of Industrial Policy & Promotion

Press Note No. 2(2013 Series)

Subject : Foreign Direct investment Policy – definition of ‘group company’

1.0 The Government has decided to incorporate the following definition of ‘group company’ in the FDI Policy contained in ‘Circular 1 of 2013 – Consolidated FDI Policy’, effective from 05-04-2013:

2.1	Definitions
2.1.15 bis	“Group company” means two or more enterprises which, directly or indirectly, are in a position to : (i) exercise twenty six per cent, or more of voting rights in other enterprise; or (ii) appoint more than fifty per cent, of members of board of directors in the other enterprise.

2.0 The above decision will take immediate effect.

 (D. V. Prasad)

Joint Secretary to the Government of India

D/o IPP File No. : No. 5/3/2005-FC.I dated 3 June 2013

Copy forwarded to:

1. Press Information Officer, Press Information Bureau- forgiving necessary publicity.

2. BE Section in the Department of Industrial Policy and Promotion-for uploading the Press Note on DIPP's website.

3. Hindi Division, DIPP for providing Hindi version.

Definition of group company sets voting-rights and board-control thresholds determining related enterprises under FDI policy. Group company is defined for FDI policy as two or more enterprises which, directly or indirectly, are in a position to exercise specified voting-right control in another enterprise or to appoint a majority of the other enterprise's board; the definition was incorporated into the Consolidated FDI Policy and directed to take immediate effect.