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What is the concept of downstream investment?

Avatar 37a3bd7bc7328f0ead2c0f6f635dddf60615e676e6b4ddf964144012e529de45 Uma asked almost 3 years ago

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Avatar 37a3bd7bc7328f0ead2c0f6f635dddf60615e676e6b4ddf964144012e529de45 CA Sandeep Bohra answered almost 3 years ago

Downstream investment’ has been defined to mean indirect foreign investment by one Indian company into another Indian company by way of subscription or acquisition. Investment by a company in another company by way of subscription or acquisition of shares or acquisition of control.

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Picsjoin 2017224123730582 Archana answered almost 3 years ago

Hie Uma, **Concept of downstream investment is :-** - A downstream investment is nothing but investment by a company in another company by way of subscription or acquisition of shares or acquisition of control. - The investment in the other Indian downstream company by an Indian company already having foreign investment is called downstream investment subject to conditions of ownership and control. - According to information from the RBI, thus, there will be two Indian Companies, a first level company which has accepted foreign investment and in turn has made investment in a second level company i.e. another Indian company.

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Avatar 37a3bd7bc7328f0ead2c0f6f635dddf60615e676e6b4ddf964144012e529de45 lochan answered almost 3 years ago

In common understanding, downstream investment would mean investment by a company in another company by way of subscription or acquisition of shares or acquisition of control. The investment in another Indian company (downstream) by an Indian company already having foreign investment is called downstream investment subject to conditions of ownership and control. Thus, there will be two Indian Companies, a first level company which has accepted foreign investment and in turn has made investment in a second level company i.e. another Indian company. [c.f. A.P. (DIR Series) Circular Numbers 1, 42 and 44 respectively dated July 4, 2013, September 13, 2013 and September 13, 2013]. Thanks

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