FDI in commercial coal mining from nations sharing land border to require government approval 

The Government clarified in a statement on August 3, 2020 that any Foreign Direct Investment (FDI) in commercial coal mining from an entity of a country that shares land border with India will have to go through the government route.

The government’s statement clarified that any FDI in commercial coal mining is subject to Applicable Laws including the Press Note 3 of 2020 issued by the Central Government. According to the laws, an entity of a country, which shares a land border with India or where the beneficial owner of investment into India is situated in or is a citizen of any such country, can invest only under the Government route. 

The statement further read that in case of a Pakistani citizen or an entity incorporated in Pakistan, the individual or entity can invest only with the approval of the Indian Government in sectors and activities other than defence, space, atomic energy and sectors and activities that are prohibited for foreign investment.

The Indian Government has issued a corrigendum to the tender document in this regard.​

Background 

The Government of India had amended the Foreign Direct Investment (FDI) Policy, 2017 recently by issuing Press Note 4 of 2019 to allow 100 percent Foreign Direct Investment in coal mining activities including associated processing infrastructure.

The move has been allowed to enable sale of coal subject to the provisions of Coal Mines (Special Provisions) Act, 2015 and the Mines and Minerals (Development and Regulation) Act, 1957 as amended from time to time and other relevant Acts on the subject.​​

This is in line with the ongoing auction process of coal mines to begin commercial coal mining in India. Commercial Coal-mining was announced in June 2020 by the Union Ministry of Coal under centre’s massive ‘Atmanirbhar Bharat Package’ to make India self-reliant and one of the leading players in the global market. 

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