<ul><li>The government clarified that Indian companies operating in sectors where FDI is prohibited can issue bonus shares to existing foreign shareholders.</li><li>The issuance of bonus shares must comply with all applicable laws and regulations.</li><li>The clarification confirms that companies in prohibited sectors can allot bonus shares to non-resident shareholders without breaching FDI restrictions, as long as no new foreign investment is introduced.</li><li>FDI is allowed through the automatic route in most sectors, while some sensitive sectors require government approval for foreign investors.</li></ul>

Centre Clarifies Rules On Issue Of Bonus shares To Existing Foreign Investors

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