The Reserve Bank of India and the Enforcement Directorate are investigating several companies that have received investments from their foreign subsidiaries or affiliates on the ground that such fund flows could indicate possible round-tripping. 
The central bank and ED, the agency that probes money laundering, have also started issuing notices to some individuals who have invested in Indian companies through investment arms registered abroad. 
The spectre of investigations has alarmed firms looking for overseas investments. They added that much of the investments are genuine, as the government has plugged most of the loopholes used earlier for routing money through foreign jurisdictions.
 “With the government amending the tax treaty with Mauritius, combined with the regulations on POEM (place of effective management), many concerns around round-tripping have been addressed. Yet, we continue to see queries from the RBI and ED. Both individuals and firms are being questioned without distinction, and often some of the most credible companies have been put under the lens”.