What is Direct Investment abroad by Indian companies? - FEMA - FAQ - FEMA

Ans: If the reporting Indian company invests in equity and/or participating preference shares of overseas company, under the Overseas Direct Investment Scheme in India, i.e. investment in Joint venture or wholly owned subsidiaries abroad, then it should be reported under Section IV of the FLA return. If the Indian company holds 10 per cent or more equity plus participating preference shares together, in overseas company, then it should be reported under 1.b ODI (item 1.1, claims on direct investment enterprise). However, if the Indian company holds less than 10 per cent of the equity plus participating preference shares capital of overseas company, then it should be reported under 2.b DI (item 1.1, claims on direct investment enterprise). In both the cases, the Indian company is called as the Direct Investor (DI) while the overseas company is called as Direct Investment Enterprise (DIE).