Foreign Direct Investment
We provide Foreign Direct Investment services.
Foreign Investment in India
Foreign Investment in India is governed by the FDI policy announced by the Government of India and the provision of the Foreign Exchange Management Act (FEMA) 1999. Reserve Bank has issued Notification No. FEMA 20/2000-RB dated May 3, 2000, which contains the Regulation in this regard. This notification has been amended from time to time.
Entry Routes for Investment in India
Foreign Investment is freely permitted in almost all sectors. Under Foreign Direct Investment scheme investments can be made by non-residents in the shares/convertible debentures of an Indian company, under two routes; Automatic Route and Government Route. Under the Automatic Route, the foreign investor or the Indian company does not require any approval from the Reserve Bank or Government of India for the investment. Under the Government Route, prior approval of Government of India, Ministry of Finance, and Foreign Investment Promotion Board (FIPB) is required. Entry route for non-resident investors in India as well as sector specific investment limits in India are given as Annexure 2.
Prohibition on Investment in India
Foreign Investment in any form is prohibited in a company or a partnership frm or a proprietary concern or any entity, whether incorporated or not (such as Trusts) which is engaged or proposes to engage in the following activities:
Business of chit fund, or
Nidhi Company, or
Agricultural or plantation activities, or
Real estate business, or construction of farm houses
Trading in Transferable Development Rights (TDRs)
It is clarified that Real Estate Business does not include development of townships, construction of residential/commercial premises, roads or bridges. It is further clarified that partnership firms/proprietorship concerns having investment as per FEMA regulations are not allowed to engage in Print Media sector.
In addition to the above, investment in the form of FDI is also prohibited in certain sectors such as (Annexure 1):
Gambling and Betting
Agriculture (excluding Floriculture, Horiculture, Development of seeds, Animal Husbandry, Pisiculture and Cultivation of vegetables, mushrooms etc. under controlled conditions and services related to agro and allied sectors) and Plantation (Other than Tea plantations).
Eligibility for Investing in India
A person resident outside India (other than a citizen of Pakistan or Bangladesh) or an entity incorporated outside India, (other than an entity incorporated in Pakistan or Bangladesh) can invest in India, subject to the FDI policy of the Government of India.
A person who is citizen of Bangladesh or an entity incorporated in Bangladesh can invest in India under the FDI scheme, with prior approval of FIPB.