New Delhi, April 9 -- The Department for Promotion of Industry and Internal Trade (DPIIT) has issued a clarification stating that Indian companies operating in sectors where Foreign Direct Investment (FDI) is prohibited can issue bonus shares to their existing non-resident shareholders, provided there is no change in the shareholding pattern.

According to the clarification now inserted in the FDI policy, "An Indian company engaged in a sector/activity prohibited for FDI is permitted to issue bonus shares to its pre-existing non-resident shareholders provided that the shareholding pattern of the non-resident shareholder does not change pursuant to the issuance of bonus shares."

The DPIIT emphasised that such issuances must comply with al...