According to finance ministry officials, the company had told the government that it would infuse $50 million in its Indian operations, as committed originally. JP Morgan had set up shop in India in 1998 by investing $15 million.
The officials said JP Morgan International Finance had again approached the Foreign Investment Promotion Board (FIPB) recently to seek an exemption from the divestment clause.
The FIPB secretariat, which is now part of the finance ministry, decided to exempt the company in line with the progressive liberalisation in foreign investment norms. The board approved the proposal at its meeting on July 4.
In 1998, the FIPB had inserted the 26 per cent mandatory divestment clause for several global companies in the non-banking financial sector. However, the board did away with the clause in 2001. Global corporations, which set up shop in India subsequently, were not required to compulsorily offload a part of their stake.
The officials told Business Standard that companies which took risks and entered India in the past should not be penalised, especially after the investment norms were liberalised.
