Foreign direct investment (FDI) has been recognized as an important instrument for advancing India’s foreign exchange resources, its technological base and for globalizing the Indian economy. Gambling (gaming), lottery business and betting are not open to FDI – including portfolio investments by foreign institutional investors (FIIs), non-resident Indians (NRI) or overseas corporate bodies (OCB); investments on non-repatriation basis; and investment by foreign venture capital investors.
Partner
Crawford Bayley & Co
Press Note No 5 of 2002 expressly clarified that both foreign investment and foreign technology collaboration in any form are completely prohibited in the lottery business, gambling and betting sector.
The prohibition is a ban on both FDI and FII as distinguished from a separate or a composite cap for FII or FDI. A report of the Committee on Liberalization of FII investment (Lahiri Committee, 2004) reiterated the need for the prohibition, noting that these are areas with dubious value added. Financing gambling operations is not easy, but there are ways around the prohibition.
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Sanjay Asher is a partner and Bhumika Batra is an associate with Crawford Bayley & Co.
Crawford Bayley & Co
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NGN Vaidya Marg
Fort Mumbai – 400 023
India
Tel: +91 22 2266 3353
Fax: +91 22 2266 3978
Email: sanjay.asher@crawfordbayley.com
