ROUND TRIPPING UNDER THE GRAB OF OVERSEAS DIRECT INVESTMENT (ODI): A LEGAL AND REGULATORY ANALYSIS
ROUND TRIPPING UNDER THE GRAB OF OVERSEAS DIRECT INVESTMENT (ODI): A LEGAL AND REGULATORY ANALYSIS Vidushi Dubey, 10th Semester, B.A.LL.B Student at Amity Law School, Amity University, Uttar Pradesh Dr. Rajeev Kumar Singh, Assistant Professor at Amity Law School, Amity University, Uttar Pradesh Download Manuscript doi.org/10.70183/lijdlr.2024.v03.22 This research paper examines the phenomenon of round tripping under the guise of Overseas Direct Investment (ODI) from India, analyzing its legal and regulatory implications. Round tripping involves the circular movement of domestic funds that exit India and return disguised as foreign investment to exploit regulatory arbitrage opportunities and preferential treatment accorded to foreign capital. The paper scrutinizes the evolving regulatory framework under the Foreign Exchange Management Act, 1999, and related notifications that govern ODI. It evaluates landmark enforcement actions by the Enforcement Directorate and dissects high-profile case studies involving corporate entities. Through comparative analysis of international regulatory approaches from jurisdictions including the United States, European Union, and China, the paper identifies best practices for addressing round tripping concerns. Despite significant regulatory enhancements, persistent challenges include beneficial ownership transparency, valuation manipulation, and emerging digital pathways for round tripping. The research proposes comprehensive reforms including a unified regulatory framework, enhanced beneficial ownership disclosure requirements, blockchain-based transaction monitoring, and strengthened international cooperation mechanisms. The paper concludes that effective regulation requires balancing legitimate business expansion needs with robust safeguards against regulatory circumvention through a substance-over-form approach to cross-border investment structures. Type Information Research Paper LawFoyer International Journal of Doctrinal Legal Research, Volume III, Issue I, Page 482-513. Creative Commons Copyright This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License. © Authors, 2024