New Delhi, April 9 -- April 9:The government on Tuesday clarified that Indian companies operating in sectors where foreign direct investment (FDI) is not allowed can still issue bonus shares to their existing foreign shareholders. However, this is only permitted if the overall shareholding pattern remains unchanged.

The Department for Promotion of Industry and Internal Trade (DPIIT) said that such transactions must follow all relevant laws and regulations.

"The issuance of bonus shares must comply with the applicable rules, laws, regulations and guidelines," the DPIIT said in a note. This clarification is now officially part of the FDI policy. With this move, companies in prohibited sectors like lottery, gambling, chit funds, and tobac...