Earlier this year, as part of its annual budget, the Indian government deferred the effective date of the new General Anti-Avoidance Rules (GAAR) to April 1, 2015. However, the government retained the GAAR provisions in the same form as they had initially been proposed in 2012, without implementing either the Shome Committee’s recommendations or the Indian Finance Minister’s announcements. In a circular dated September 23, the Indian government has clarified the application of the GAAR provisions in certain circumstances. Significantly, the government has specified a monetary threshold for applying GAAR. Furthermore, the government indicated the period for which existing arrangements may be grandfathered, and clarified how GAAR would apply to foreign institutional investors (FIIs). This newsalert summarizes those provisions in the circular that could affect foreign investors in India.