Govt likely to allow FDI in LLPs with riders.

The government is planning to allow foreign direct investment (FDI) through approval route in the new form of business entity, Limited Liability Partnership (LLP), albeit with certain riders.

Sources told The Indian Express that while FDI of 49 per cent would be allowed in LLPs on a selective basis in the services sector to ensure that the control and management of the entity remains with India, all such investments would be subject to General Agreement on Trade in Services (GATS) negotiations in the Doha round of WTO.

This means that FDI would be permitted only from the countries where commitments have been received by India on GATS. “So, WTO negotiations and commitments will override the policy,” the sources said.

The government will also not allow any foreign investment in LLPs from any tax haven so that foreign funds can be controlled and monitored as an anti-money laundering measure.

Source : indianexpress.com