TMI BlogPermission for Direct Investment in certain casesX X X X Extracts X X X X X X X X Extracts X X X X ..... e currencies; in case of Bhutan, investment made in freely convertible currencies or equivalent Indian Rupees, in case of Nepal investment made only in Indian Rupees; (b) Capitalization of export proceeds and other dues and entitlements as mentioned in Regulation 11; (c) Hundred per cent of the value of guarantees issued by the Indian party to on or behalf of the joint venture company or wholly owned subsidiary; (d) Investment in agricultural operations through overseas offices or directly; (e) External Commercial Borrowing in conformity with other parameters of the ECB guidelines; (f) Fifty per cent of the value of performance guarantee issued by the Indian party to or on behalf of the JV/WOS. Explanation : In cases where invocation of the performance guarantees breach the ceiling for the financial exposure of 100 per cent, or as decided by the Reserve Bank from time to time, of the net worth of the Indian party, the Indian party shall seek the prior approval of the Reserve Bank before remitting funds from India, on account of such invocation. (g) Hundred per cent of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... exceed 100%, or as decided by the Reserve Bank from time to time, of the net worth of the Indian Party as on the date of last audited balance sheet; Explanation: For the purpose of the limit of 100%, or as decided by the Reserve Bank from time to time, of the net worth, the following shall be reckoned, namely:] (a) cash remittance by market purchase (b) capitalisation of export proceeds and other dues and entitlements as mentioned in Regulation 11 and 12; (c) 10 hundred per cent of the value of guarantees issued by the Indian party to or on behalf of the Joint Venture company or Wholly Owned Subsidiary 11 Explanation :- an Indian Party may offer to a person resident outside India any form of guarantees, that is, corporate or personal / primary or collateral / guarantee by promoter company in India / guarantee by group company, sister concern or associate company in India, provided that : a) total 'financial commitment' including all forms of guarantees remains within the overall ceiling stipulated for overseas investment by an Indian Party and b) no guara ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ting company within the prevailing limit for overseas direct investment. Explanation: Issue of corporate guarantee on behalf of second level or subsequent level step down operating subsidiaries will be considered under the Approval Route, provided the Indian Party indirectly holds 51 per cent or more stake in the overseas subsidiary for which such guarantee is intended to be issued.] 24 [(iii) The indirect resident individual promoters of the Indian party may issue personal guarantee on behalf of the overseas JV / WOS of the Indian party provided the provisions under Regulation 6 are fulfilled by the Indian party and further provided that: a) total 'financial commitment' including all forms of guarantees remains within the overall ceiling stipulated for overseas investment by an Indian Party and b) no guarantee is 'open ended'] 25 [(iv) With prior approval of the Reserve Bank, an Indian party may undertake financial commitment without equity contribution in JV / WOS provided it is as per the business requirement of the Indian party and also as per the legal requirement of the host country.] 26 [(v) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce by market purchase and /or equivalent rupee investments in case of Nepal and Bhutan 3. For the words and figures 'shall not exceed 100% of the net worth', the words and figures 'shall not exceed 200% of the net worth' has been substituted vide Notification No. 139/2005 dated 11/8/2005 4. For the words and figures 'limit of 100% of the net worth', the words and figures 'limit of 200% of the net worth' has been substituted vide Notification No. 139/2005 dated 11/8/2005 5. Has been substituted vide Notification No. G.S.R. 13(E) dated 9/10/2007 (with effect from the 14th day of June, 2007) before it was read as, The total financial commitment of the Indian party in Joint Ventures/Wholly Owned Subsidiaries 3 shall not exceed 200% of the net worth of the Indian Party as on the date of the last audited balance sheet; - 2(i) has been further substituted vide notification no. 173/2007 dated 19-12-200 7 with effect from 26-9-2007, before substitution it was read as: (i) The total financial commitment of the Indian Party in Joint Ventures/Wholly Owned Subsidiaries shall not exceed 300% of the net worth of the Indian Party as on the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s and shall not exceed 200% of the net worth in case of registered partnership firms . 10. For the words fifty per cent of the amount of guarantees the words hundred per cent of the amount of guarantees has been substituted (with effect from the 14th day of June, 2007) vide Notification No. G.S.R. 13(E) dated 9/10/2007 11. Has been inserted vide Notification No. G.S.R. 13(E) dated 9/10/2007 (with effect from the 27th day of March, 2006) 12. Has been inserted vide Notification No. G.S.R. 13(E) dated 9/10/2007 (with effect from the 7th day of July, 2004 ) 13. Has been inserted vide Notification No. G.S.R. 13(E) dated 9/10/2007 (with effect from the 20th day of April, 2007) 14. Has been substituted vide Notification No. 180/2008 dated 5/9/2008 before it was read as, iv. The Indian party has submitted up to date returns in form APR in respect of all its overseas investments; 15. Has been substituted vide Notification No. 180/2008 dated 5/9/2008 before it was read as, vi. The Indian Party submits form ODA, duly completed, to the designated branch of an authorised dealer. 16. Has been substituted vide Notification No. 180/2008 dated 5/9/20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... freely convertible currencies or equivalent Indian Rupees; in case of Nepal investment made only in Indian Rupees. (b) capitalisation of export proceeds and other dues and entitlements as mentioned in Regulation 11; (c) 7 hundred per cent of the value of guarantees issued by the Indian party to or on behalf of the joint venture company or wholly owned subsidiary. (d) investment in agricultural operations through overseas offices or directly (e) External Commercial Borrowing in conformity with other parameters of the ECB guidelines 18 [ Overseas direct investment by an Indian Party in Pakistan shall henceforth be considered under the approval route under regulation 9 of this Notification. ] 19 [ (f) Fifty per cent of the value of performance guarantee issued by Indian Party to or on behalf of the JV/WOS. Explanation: In cases where invocation of the performance guarantees breach the ceiling for the financial exposure of 400 per cent of the net worth of the Indian Party, the Indian Party shall seek the prior approval of the Reserve Bank before remitting funds from India, on account of such invocation. ] 20 [ (g) hundred per cent of the value ..... X X X X Extracts X X X X X X X X Extracts X X X X
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