Lok Sabha Question No. 3499 (UNSTARRED), answered on 2021-03-17
Subject: Chinese Investment in Indigenously Developed Application
Ministry: ELECTRONICS AND INFORMATION TECHNOLOGY
Asked by: M. Selvaraj, Amar Singh, A. Chellakumar, K. Muraleedharan

## GOVERNMENT OF INDIA MINISTRY OF ELECTRONICS AND INFORMATION TECHNOLOGY

## LOK SABHA UNSTARRED QUESTION NO. 3499

TO BE ANSWERED ON 17.03.2021

## CHINESE INVESTMENT IN INDIGENOUSLY DEVELOPED APPLICATION

## 499. SHRI M. SELVARAJ:

DR. AMAR SINGH:

DR. A . CHALLAKUMAR:

SHRI K. MURALEEDHARAN:

## ill the Minister of Electronics and Information Technology be pleased to state:

) whether the Ministry was aware of the Chinese investment in the parent firm of the social media Koo app at the me of its appraisal and if so, the details thereof and the reaction of the Government thereto;

) whether the Government took note of the Chinese investment while evaluating the proposal on the said social edia app and if so, the details thereof and the reaction of the Government thereto;

) the date on which the Government became aware of the Chinese investment in the said app;

)  whether there are any criteria to be followed by the app developer with respect to indigeneity of the mobile pps and if so, the details thereof; and

) the mechanism instituted by the Government to monitor the foreign investment in the indegeneously developed oftware application?

## ANSWER

## MINISTER OF STATE FOR  ELECTRONICS AND INFORMATION TECHNOLOGY (SHRI SANJAY DHOTRE)

) to (d):  Under the extant FDI Policy of Government of India, 100% investment through automatic route was llowed for IT companies till notification of Press Note 3 of Department for Promotion of Industry and Internal rade  (DPIIT),  Ministry  of  Commerce  &  Industry  dated  17 th April  2020.  Koo  App  has  been  developed  by  an dian IT company prior to such notification.

inistry  of  Electronics  and  Information  Technology  (MeitY)  launched  Digital  India  AatmaNirbhar  App novation  Challenge  on  July  2  2020.  The  challenge  was  open  for  participation  by  Indian  entrepreneurs  and tartups only. Koo App was  shortlisted as an awardee for the said AatmaNirbhar App Challenge under the Social edia Category as it was an eligible participant to be classified as domestic company as per the extant FDI policy. s per the details provided by the company that has developed the app, it has been indigenously developed and pp data is completely stored in India in its servers located in Mumbai. Being an Indian company with operations ithin the country, it has to adhere to all the existing data privacy and security regulations of the Government.

):   As per Press Note No. 3 of DPIIT, FDI Policy Section, Para 3.1.1(a) states that 'A non-resident entity can vest in India, subject to the FDI Policy except in those sectors/activities which are prohibited. However, an entity f  a  country,  which  shares  land border with  India or where the beneficial owner of  an investment into India is ituated in or is a citizen of any such country, can invest only under the Government route."

lso as per para 3.1.1(b), "In the event of the transfer of ownership of any existing or future FDI in an entity in dia, directly or indirectly, resulting in the beneficial ownership falling within the restriction/purview of the para .1.1(a), such subsequent change in beneficial ownership will also require Government approval."

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