New Delhi, Apr 23 (KNN) The Finance Ministry has notified the changes in Foreign Direct Investment (FDI) rules making prior it mandatory to seek approval of the government for foreign investments from countries that share border with India.

The move aims to prevent takeover of domestic firms amid COVID-19 pandemic under the FEMA law.

The countries which share land borders with India are China, Bangladesh, Pakistan, Bhutan, Nepal, Myanmar and Afghanistan.

The Department of Economic Affairs, under the ministry, has notified these amendments to the FDI policy under the Foreign Exchange Management Act, 1999 (FEMA).

"In exercise of the powers conferred by clauses (aa) and (ab) of sub-section (2) of section 46 of the Foreign Exchange Management Act, 1999, the Central Government hereby makes the following rules further to amend the Foreign Exchange Management (Non-debt Instruments) Rules, 2019...," the department said in a notification.

Change in FDI policy needs to be notified under FEMA for its implementation.

"Provided that an entity of a country, which shares a land border with India or the beneficial owner of an investment into India who is situated in or is a citizen of any such country, shall invest only with the Government approval," it said.

The Department for Promotion of Industry and Internal Trade (DPIIT) on 18 April issued a press note stating that the government has amended the FDI (foreign direct investment) policy to curb "opportunistic takeovers/acquisitions" of Indian companies on account of COVID-19 pandemic.