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Master Circular on Foreign Investment in India

FEMA - 15/2015-16 - Dated:- 1-7-2015 - RBI/2015-16/96 Master Circular No. 15/2015-16 July 01, 2015 To, All Category - I Authorised Dealer banks Madam / Sir, Foreign investment in India is governed by sub-section (3) of Section 6 of the Foreign Exchange Management Act, 1999 read with Notification No. FEMA 20/2000-RB dated May 3, 2000, as amended from time to time. The regulatory framework and instructions issued by the Reserve Bank have been compiled in this Master Circular. The list of underlyin .....

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to which the Master Circular has been updated is suitably indicated. 3. This Master Circular may be referred to for general guidance. The Authorised Persons and the Authorised Dealer Category - I banks may refer to respective circulars/ notifications for detailed information, if so needed. Yours faithfully, (B. P. Kanungo) Principal Chief General Manager INDEX PART - I Foreign Investments in India - Schematic Representation Section - I: Foreign Direct Investment 1. Foreign Direct Investment in I .....

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ployees Stock Option Scheme (ESOPs) 22 8.E Conversion of ECB / Lumpsum Fee/Royalty/Import of capital goods by SEZs in to Equity/Import payables/Pre incorporation expenses 22 8.F Issue of eligible securities by Indian Companies under Depository 25 Receipts Scheme, 2014 (DR Scheme 2014). 8.G FDI through issue/transfer of 'participating interest / right' in oil fields to a NR 26 9. Foreign currency account and escrow account. 26 10. Acquisition of shares under scheme of merger / amalgamatio .....

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Investment Scheme (PIS) 1. Entities 41 2. Investment in listed Indian companies 42 3. Accounts with AD Category - I banks 44 4. Exchange Traded Derivative Contracts 45 5. Collateral for FIIs 45 6. Short Selling of FIIs 46 7. Private placement with FIIs 47 8. Transfer of shares acquired under PIS 47 9. Monitoring of Investment position by RBI and AD banks 47 10. Prior intimation to Reserve Bank of India 48 11. Caution List 48 12. Ban List 48 13. Issue of irrevocable payment commitment (IPCs) to .....

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Development Banks (MDBs) 61 5. Foreign investment in Tier I and Tier II instruments issued by banks in India 61 6. Qualified foreign investors (QFIs) investment in the units of domestic mutual funds 62 7. Infrastructure Debt Fund. 63 8. Purchase of other securities by QFIs 63 Section - V: Reporting guidelines for Foreign Investments in India as per Section I and II 1. Reporting of FDI for fresh issuance of shares 66 2. Reporting of Annual return on Foreign Liabilities and Assets 66 3. Reporting .....

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estments with repatriation benefits 72 3. Investment by non-residents other than NRIs/PIO 72 4. Restrictions 73 Annexures Page No. Annex A - Salient features of Portfolio Investment Scheme (PIS) for investments by a Non Resident Indian (NRI) 74 Annex B n- Scheme for Acquisition/ Transfer by a person resident outside India of capital contribution or profit share of Limited Liability Partnerships (LLPs) 78 Annex - 1 Sector-Specific Policy For Foreign Investment 82 Annex - 2 Sectors prohibited for .....

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e form 123 Annex - 7 - Know Your Customer (KYC) Form in Respect Of The Non-Resident Investor 125 Annex - 8 - FC- GPR 126 Annex - 9-I - FC-TRS 135 Annex - 9-II Know Your Customer (KYC) Form in respect of the non-resident investor 141 Annex - 10 Return to be filed by an Indian Company who has arranged issue of GDR/ADR 142 Annex-11 Form FOREIGN DIRECT INVESTMENT LLP(I) 143 Annex-12 Form FOREIGN DIRECT INVESTMENT LLP(II) 150 Annex-13 Appendix of A.P. DIR and Notifications 155 Section - I: Foreign Di .....

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ted FDI Policy Circular dated April 17, 2014 is available in the public domain and can be downloaded from the website of Ministry of Commerce and Industry, Department of Industrial Policy and Promotion http://dipp.nic.in/English/Policies/FDI_Circular_2014.pdf governed by the provisions of the Foreign Exchange Management Act (FEMA), 1999. FEMA Regulations which prescribe amongst other things the mode of investments i.e. issue or acquisition of shares / convertible debentures and preference shares .....

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ence shares1 of an Indian company by non-residents through two routes: o Automatic 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. o Government Route: Under the Government Route, the foreign investor or the Indian company should obtain prior approval of the Government of India(Foreign Investment Promotion Board (FIPB), Department of Economic Affairs (DEA), Ministry of Finan .....

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kistan can invest in India under the FDI Schemewith the prior approval of the FIPBsubject to terms and conditions mentioned in FDI Policy and Foreign Exchange Management (Transfer or issue of security by a person resident outside India) Regulations, 2000. (ii) NRIs, resident in Nepal and Bhutan as well as citizens of Nepal and Bhutan are permitted to invest in shares and convertible debentures of Indian companies under FDI Scheme on repatriation basis, subject to the condition that the amount of .....

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nment of India if the investment is through the Government Route; and with the prior approval of the Reserve Bank, if the investment is through the Automatic Route. However, before making any fresh FDI under the FDI scheme, an erstwhile OCB should through their AD bank, take a one time certification from RBI that it is not in the adverse list being maintained with the Reserve Bank of India. ADs should also ensure that OCBs do not maintain any account other than NRO current account in line with t .....

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adverse list of the Reserve Bank of India. These accounts are to be maintained by the respective AD banks in the frozen status. 4. Type of instruments i) Indian companies can issue equity shares, fully and mandatorily convertible debentures, fully and mandatorily convertible preference shares and warrants subject to the pricing guidelines / valuation norms and reporting requirements amongst other requirements as prescribed under FEMA Regulations. ii) Prior to December 30, 2013, issue of other ty .....

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ity clause will oblige the buy-back of securities from the investor at the price prevailing/value determined at the time of exercise of the optionality so as to enable the investor to exit without any assured return. The provision of optionality clause shall be subject to the following conditions: (a) There is a minimum lock-in period of one year or a minimum lock-in period as prescribed under FDI Regulations, whichever is higher (e.g. defence sector where the lock-in period of three years has b .....

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t the market price prevailing at the recognised stock exchanges; (ii) In case of unlisted company, the non-resident investor shall be eligible to exit from the investment in equity shares of the investee company at a price as per any internationally accepted pricing methodology on arm s length basis, duly certified by a Chartered Accountant or a SEBI registered Merchant Banker. The guiding principle would be that the non-resident investor is not guaranteed any assured exit price at the time of m .....

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ationally accepted pricing methodology on arm s length basis. The pricing guidelines as above are subject to pricing guidelines as enumerated in paragraph above, for exit from FDI with optionality clauses by non-resident investor. The above pricing guidelines are also applicable for issue of shares against payment of lump sum technical know how fee / royalty due for payment/repayment or conversion of ECB into equity or capitalization of pre incorporation expenses/import payables (with prior appr .....

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lation 17 of the SEBI (Issue of Capital and Disclosure Requirements(ICDR)) Regulations regarding monitoring agency. Similarly, in case of an unlisted Indian company, the balance consideration amount can be received after 12 months where the issue size exceeds rupees five hundred crores. However, the investee company shall appoint a monitoring agency on the same lines as required in case of a listed Indian company under the SEBI (ICDR) Regulations. Such monitoring agency (AD Category -1 bank) sha .....

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warrants, in accordance with the extant FEMA Regulations and pricing guidelines stipulated by RBI from time to time. Thus, Investee company shall be free to receive consideration more than the pre-agreed price. 3It is clarified that where the liability sought to be converted by the company is denominated in foreign currency as in case of ECB, import of capital goods, etc. it will be in order to apply the exchange rate prevailing on the date of the agreement between the parties concerned for suc .....

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above shall apply, mutatis mutandis, to all cases where any payables/liability by an Indian company such as, lump sum fees/royalties, etc. are permitted to be converted to equity shares or other securities to be issued to a non-resident subject to the conditions stipulated under the respective Regulations. However, where non-residents (including NRIs) are making investments in an Indian company in compliance with the provisions of the Companies Act, 2013, by way of subscription to its Memorandum .....

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e with the provisions of the Companies Act, 2013 and Income tax provisions, as applicable; (c) The company while issuing partly paid shares or warrants shall ensure that the sectoral caps are not breached even after the shares get fully paid-up or warrants get converted into fully paid equity shares. Similarly, the Non-resident investors acquiring partly paid shares or convertible debentures or warrants shall ensure that the sectoral caps are not breached even after the shares get fully paid-up .....

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s Act, 2013 for issuance of partly paid shares and warrants; Issue of shares by SEZs against import of capital goods: In this case, the share valuation has to be done by a Committee consisting of Development Commissioner and the appropriate Customs officials. Right Shares: The price of shares offered on rights basis by the Indian company to non-resident shareholders shall be: i) In the case of shares of a company listed on a recognised stock exchange in India, at a price as determined by the com .....

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isted on a recognized stock exchange in India which shall not be less than the price at which the preferential allotment of shares can be made under the SEBI guidelines, as applicable, provided the same is determined for such duration as specified therein, preceding the relevant date, which shall be the date of purchase or sale of shares. The price per share arrived at should be certified by a SEBI registered Merchant Banker or a Chartered Accountant. (b) negotiated price for shares of companies .....

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the transfer of shares can be made from a resident to a non-resident as given above. The pricing of shares/convertible debentures/preference shares should be decided/determined upfront at the time of issue of the instruments. The price for the convertible instruments can also be a determined based on the conversion formula which has to be determined / fixed upfront, however the price at the time of conversion should not be less than the fair value worked out, at the time of issuance of these ins .....

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nking channels. (ii) debit to NRE/FCNR account of a person concerned maintained with an AD category I bank. (iii) conversion of royalty / lump sum / technical know how fee due for payment /import of capital goods by units in SEZ or conversion of ECB, shall be treated as consideration for issue of shares. (iv) conversion of import payables / pre incorporation expenses / share swap can be treated as consideration for issue of shares with the approval of FIPB. (v) debit to non-interest bearing Escr .....

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made to it and for sufficient reasons, permit an Indian Company to refund/allot shares for the amount of consideration received towards issue of security if such amount is outstanding beyond the period of 180 days from the date of receipt. 7. Foreign Investment limits, Prohibited Sectors and investment in MSEs a) Foreign Investment Limits The details of the entry route applicable and the maximum permissible foreign investment/sectoral cap in an Indian Company are determined by the sector in whi .....

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Technology Park or in an Electronic Hardware Technology Park, and which is not engaged in any activity/sector mentioned in Annex 2 may issue shares or convertible debentures to a person resident outside India (other than a resident of Pakistan and to a resident of Bangladesh under approval route), subject to the prescribed limits as per FDI Policy, in accordance with the Entry Routes and the provision of Foreign Direct Investment Policy, as notified by the Ministry of Commerce & Industry, Go .....

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hever is lower. Issue of shares in excess of 24 per cent of paid-up capital shall require prior approval of the FIPB of the Government of India and shall be in compliance with the terms and conditions of such approval. Further, in terms of the provisions of MSMED Act, (i) in the case of the enterprises engaged in the manufacture or production of goods pertaining to any industry specified in the first schedule to the Industries (Development and Regulation) Act, 1951, a micro enterprise means wher .....

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xceed two crore rupees. c) Prohibition on foreign investment in India (i) Foreign investment in any form is prohibited in a company or a partnership firm or a proprietary concern or any entity, whether incorporated or not (such as, Trusts) which is engaged or proposes to engage in the following activities4: (a) Business of chit fund, or (b) Nidhi company, or (c) Agricultural or plantation activities, or (d) Real estate business, or construction of farm houses, or (e) Trading in Transferable Deve .....

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hall be brought in through normal banking channel, including through an account maintained with a bank in India. (iii) Further, It is clarified that real estate business means dealing in land and immovable property with a view to earning profit or earning income therefrom and does not include development of townships, construction of residential / commercial premises, roads or bridges, educational institutions, recreational facilities, city and regional level infrastructure, townships. It is als .....

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DRs) (f) Real Estate Business or Construction of Farm Houses (g) Manufacturing of Cigars, cheroots, cigarillos and cigarettes, of tobacco or of tobacco substitutes (h) Activities/sectors not open to private sector investment e.g. (I) Atomic energy and (II) Railway operations (other than permitted activities mentioned in entry 18 of Annex B). Note: Foreign technology collaboration in any form including licensing for franchise, trademark, brand name, management contract is also prohibited for Lott .....

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y the company An Indian company may issue fresh shares /convertible debentures under the FDI Scheme to a person resident outside India (who is eligible for investment in India) subject to compliance with the extant FDI policy and the FEMA Regulation. 8 B. Acquisition by way of transfer of existing shares by person resident in or outside India Foreign investors can also invest in Indian companies by purchasing / acquiring existing shares from Indian shareholders or from other non-resident shareho .....

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d require prior approval of the Reserve Bank of India. b. NRI to NRI (Sale/Gift): NRIs may transfer by way of sale or gift the shares or convertible debentures held by them to another NRI. c. Non Resident to Resident(Sale/Gift): (i) Gift: A person resident outside India can transfer any security to a person resident in India by way of gift. (ii) Sale under private arrangement: General permission is also available for transfer of shares / convertible debentures, by way of sale under private arran .....

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ficate to the effect that compliance with relevant SEBI regulations as indicated above is attached to the Form FC-TRS to be filed with the AD bank. (d) Compliance with reporting and other guidelines as given in Annex 3. Note: Transfer of shares from a Non Resident to Resident other than under SEBI regulations and where the FEMA pricing guidelines are not met would require the prior approval of the Reserve Bank of India. iii) Sale of shares/ convertible debentures on the Stock Exchange by person .....

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the transaction is in compliance with the provisions of the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeover)[SEBI(SAST)] Regulations; b) the guarantee given by the AD Category -I bank is covered by a counter guarantee of a bank of international repute. It may be noted that the guarantee shall be valid for a tenure co-terminus with the offer period as required under the SEBI (SAST) Regulations. In case of invocation of the guarantee, the AD Category-I bank .....

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o a person resident outside India, subject to the following alongwith pricing, reporting and other guidelines given in Annex - 3 a) where the transfer of shares requires the prior approval of the FIPB as per extant FDI policy provided that; i) the requisite FIPB approval has been obtained; and ii) the transfer of share adheres with the pricing guidelines and documentation requirements as specified by the Reserve Bank of India from time to time. b) where SEBI (SAST) guidelines are attracted, subj .....

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extant and relevant SEBI regulations(such as IPO, book building, block deals, delisting, open/ exit offer, substantial acquisition/SEBI(SAST); and iii) CA Certificate to the effect that compliance with relevant SEBI regulations as indicated above is attached to the Form FC-TRS to be filed with the AD bank. d) where the investee company is in the financial services sector provided that: i). 9With effect from October 11, 2103, the requirement of NoC(s) from the respective regulators/regulators of .....

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egulations in terms of sectoral caps, conditionalities (such as minimum capitalization, etc.), reporting requirements, documentation etc., are complied with. Note: The above general permission also covers transfer by a resident to a non-resident of shares / convertible debentures of an Indian company, engaged in an activity earlier covered under the Government Route but now falling under Automatic Route of the Reserve Bank, as well as transfer of shares by a non-resident to an Indian company und .....

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overnment approval : (i) Transfer of shares of companies engaged in sector falling under the Government Route. (ii) Transfer of shares resulting in foreign investments in the Indian company, breaching the sectoral cap applicable. 8.B. IV Prior permission of the Reserve Bank in certain cases for acquisition/ transfer of security (i) Transfer of shares or convertible debentures from residents to non-residents by way of sale requires prior approval of Reserve Bank in case where the non-resident acq .....

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serve Bank for approval for transfer of shares by way of gift, the documents mentioned in Annex - 4 should be enclosed. The Reserve Bank considers the following factors while processing such applications: a) The proposed transferee is eligible to hold such security under Schedules 1, 4 and 5 of Notification No. FEMA 20/2000-RB dated May 3, 2000, as amended from time to time. b) The gift does not exceed 5 per cent of the paid-up capital of the Indian company/ each series of debentures / each mutu .....

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50,000 per financial year. f) Such other conditions as stipulated by the Reserve Bank in public interest from time to time. (iii) Transfer of shares from NRI to NR requires the prior approval of the Reserve Bank of India. 8.B.V - Escrow account for transfer of shares AD Category - I banks have been given general permission to open and maintain non-interest bearing Escrow account in Indian Rupees in India on behalf of residents and non-residents, towards payment of share purchase consideration an .....

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y on the stock exchange through a registered broker under FDI scheme provided that: i. The non-resident investor has already acquired and continues to hold the control in accordance with SEBI (Substantial Acquisition of Shares and Takeover) Regulations; ii. The amount of consideration for transfer of shares to non-resident consequent to purchase on the stock exchange may be paid as below: (a) by way of inward remittance through normal banking channels, or (b) by way of debit to the NRE/FCNR acco .....

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en credited to specially designated non -interest bearing rupee account for acquisition of shares on the floor of stock exchange. iii. The pricing for subsequent transfer of shares shall be in accordance with the pricing guidelines under FEMA; iv. The original and resultant investments are in line with the extant FDI policy and FEMA regulations in respect of sectoral cap, entry route, reporting requirement, documentation, etc; 8.B.VII The reporting guidelines are given in Section V of the Master .....

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t from September 16, 2003. Therefore, companies desiring to issue rights share to such erstwhile OCBs will have to take specific prior permission from the Reserve Bank. As such, entitlement of rights share is not automatically available to OCBs. However, bonus shares can be issued to erstwhile OCBs without prior approval of the Reserve Bank, provided that the OCB is not in the adverse list of RBI. o Additional allocation of rights share by residents to non-residents : Existing non-resident share .....

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OPs to its employees or employees of its joint venture or wholly owned subsidiary abroad who are resident outside India, other than to the citizens of Pakistan. Citizens of Bangladesh can invest with the prior approval of the FIPB. The face value of the shares to be allotted under the scheme to the non-resident employees should not exceed 5 per cent of the paid-up capital of the issuing company. Shares under ESOPs can be issued directly or through a Trust subject to the condition that the scheme .....

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ting requirements: a) The activity of the company is covered under the Automatic Route for FDI or the company has obtained Government's approval for foreign equity in the company; b) The foreign equity after conversion of ECB into equity is within the sectoral cap, if any; c) Pricing of shares is determined as per SEBI regulations for listed company or fair value worked out as per any internationally accepted pricing methodology for valuation of shares for unlisted company; d) Compliance wit .....

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te, subject to pricing guidelines of RBI/SEBI and compliance with applicable tax laws. (iii) Units in Special Economic Zones (SEZs) are permitted to issue equity shares to nonresidents against import of capital goods subject to the valuation done by a Committee consisting of Development Commissioner and the appropriate Customs officials. (iv) Issue of equity shares against Import of capital goods / machinery / equipment (excluding second-hand machinery), is allowed under the Government route, su .....

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third party entity, preferably by an independent valuer from the country of import along with production of copies of documents /certificates issued by the customs authorities towards assessment of the fair-value of such imports; (c) The application should clearly indicate the beneficial ownership and identity of the importer company as well as the overseas entity; and (d) Applications complete in all respects, for conversions of import payables for capital goods into FDI being made within 180 d .....

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tor to the company directly or through the bank account opened by the foreign investor, as provided under FEMA regulations. (as amended vide AP DIR Circular No. 104 dated May 17, 2013) . d) The applications, complete in all respects, for capitalisation being made within the period of 180 days from the date of incorporation of the company. General conditions for issue of equity shares against Import of capital goods / machinery/equipment and Pre-operative/pre - incorporation expenses: (a) All req .....

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e prior permission of the Government of India or Reserve Bank of India under FEMA ,1999 or any rules/ regulations framed or directions issued thereunder, provided that:11 (a) The equity shares shall be issued in accordance with the extant FDI guidelines on sectoral caps, pricing guidelines etc. as amended by Reserve Bank of India, from time to time; (b) The issue of equity shares under this provision shall be subject to tax laws as applicable to the funds payable and the conversion to equity sho .....

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of Schedule 10 to Notification No. FEMA.20/2000-RB dated May 3, 2000, a person will be eligible to issue or transfer eligible securities to a foreign depository, for the purpose of converting the securities so purchased into depository receipts in terms of Depository Receipts Scheme, 2014 and guidelines issued by the Government of India thereunder from time to time. Depository Receipts issued under the Issue of Foreign Currency Convertible Bonds and Ordinary Shares (Through Depository Receipt M .....

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ferred to foreign depositories, along with eligible securities already held by persons resident outside India, shall not exceed the limit on foreign holding of such eligible securities under the the relevant regulations framed under FEMA, 1999. iv. The eligible securities shall not be issued or transferred to a foreign depository for the purpose of issuing depository receipts at a price less than the price applicable to a corresponding mode of issue or transfer of such securities to domestic inv .....

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way of issue / transfer of participating interest/right in oil fields by Indian companies to a non resident is treated as an FDI under the extant FDI policy and the FEMA regulations. Accordingly, these transactions have to be reported as FDI transactions. Transfer of participating interest/ rights will be reported as other category under Para 7 of revised Form FC-TRS and issuance of participating interest/ rights will be reported as other category of instruments under Para 4 of Form FC-GPR. 9. F .....

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ts, towards payment of share purchase consideration and / or provide Escrow facilities for keeping securities to facilitate FDI transactions. It has also been decided to permit SEBI authorised Depository Participant, to open and maintain, without approval of the Reserve Bank, Escrow account for securities. The Escrow account would also be subject to the terms and conditions as stipulated in A.P. (DIR Series) Circular No. 58 dated May 2, 2011. Further, the Escrow account would be maintained with .....

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d by the companies undergoing merger/amalgamation. Once the scheme of merger or amalgamation of two or more Indian companies has been approved by a Court in India, the transferee company or new company is allowed to issue shares to the shareholders of the transferor company resident outside India, subject to the conditions that : (i) the percentage of shareholding of persons resident outside India in the transferee or new company does not exceed the sectoral cap, and (ii) the transferor company .....

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e Tax Department has been produced. 12. Remittance on winding up/liquidation of Companies AD Category - I banks have been allowed to remit winding up proceeds of companies in India, which are under liquidation, subject to payment of applicable taxes. Liquidation may be subject to any order issued by the court winding up the company or the official liquidator in case of voluntary winding up under the provisions of the Companies Act, 2013. AD Category - I banks shall allow the remittance provided .....

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gs pending in any court in India against the applicant or the company under liquidation and there is no legal impediment in permitting the remittance. 13. Pledge of Shares a) A person being a promoter of a company registered in India (borrowing company), which has raised external commercial borrowings, may pledge the shares of the borrowing company or that of its associate resident companies for the purpose of securing the ECB raised by the borrowing company, provided that a no objection for the .....

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Registration Number (LRN) from the Reserve Bank: and the said pledge would be subject to the following conditions : i). the period of such pledge shall be co-terminus with the maturity of the underlying ECB; ii). in case of invocation of pledge, transfer shall be in accordance with the extant FDI Policy and directions issued by the Reserve Bank; iii). the Statutory Auditor has certified that the borrowing company will be utilized / has utilized the proceeds of the ECB for the permitted end use/ .....

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company that the loan proceeds will be / have been utilized for the declared purpose; iii. the Indian company has to follow the relevant SEBI disclosure norms; and iv. pledge of shares in favour of the lender (bank) would be subject to Section 19 of the Banking Regulation Act, 1949. c) Non-resident holding shares of an Indian company, can pledge these shares in favour of an overseas bank to secure the credit facilities being extended to the non-resident investor/non-resident promoter of the Ind .....

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certificate from a Chartered Accountant/ Certified Public Accountant of the non-resident borrower that the loan proceeds will be / have been utilized for the declared purpose. 12(d) AD Category - I banks have been delegated the powers to allow pledge of equity shares of an Indian company held by non-resident investor/s in accordance with the FDI policy, in favour of the Non - Banking Financial Companies (NBFCs) - whether listed or not, to secure the credit facilities extended to the resident in .....

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obtain a board resolution ex ante , passed by the Board of Directors of the investee company, that the loan proceeds received consequent to pledge of shares will be utilised by the investee company for the declared purpose; (ii) The AD may also obtain a certificate ex post , from the statutory auditor of investee company, that the loan proceeds received consequent to pledge of shares, have been utilised by the investee company for the declared purpose; iv. the Indian company has to follow the re .....

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guidelines, shall come into force from February 13, 2009 as mentioned in the Notification No.FEMA.278/2013-RB dated June 07, 2013 and notified vide G.S.R.393(E) dated June 21, 2013. (ii) Any foreign investment already made in accordance with the guidelines in existence prior to February 13, 2009 would not require any modification, to conform to these guidelines. All other investments, after the said date, would come under the ambit of these new guidelines. (iii) As regards investments made betw .....

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cases as compliant with these guidelines within a period of six months or such extended time as considered appropriate by RBI, in consultation with Government of India. A. Definitions 1 (i) Ownership and Control a) Company Owned by resident Indian citizens shall be an Indian company if more than 50% of the capital in it is beneficially owned by resident Indian citizens and/or Indian companies, which are ultimately owned and controlled by resident Indian citizens; b) Company Owned by non-residen .....

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estments have been made under Schedule 1, 2, 2A, 3, 6 and 8 of the Notification No. FEMA. 20/2000-RB dated May 3, 2000, as amended from time to time; (iii) Downstream investment means indirect foreign investment, by one Indian company into another Indian company, by way of subscription or acquisition; (iv) 'Holding Company would have the same meaning as defined in Companies Act 2013; (v) Indian Company' means a company incorporated in India under the Companies Act, 2013; (vi) Indirect fo .....

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investment in the operating-cum-investing/ investing company. (vii) Investing Company means an Indian Company holding only investments in other Indian company/ies directly or indirectly, other than for trading of such holdings/securities; (viii) Non-Resident Entity means person resident outside India (as defined at Section 2(w) of FEMA, 1999); (ix) Resident Entity means person resident in India (as defined at Section 2(v) of FEMA, 1999), excluding an individual; (x) Resident Indian citizen shal .....

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ct foreign investment. Investment by resident Indian entities could again comprise both resident and non-resident investments. Thus, such an Indian company would have indirect foreign investment if the Indian investing company has foreign investment in it. The indirect investment can also be a cascading investment, i.e. through multi-layered structure. C. Guidelines for calculation of total foreign investment, i.e., direct and indirect foreign investment in an Indian company. 3.(i) Counting of D .....

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sting/investing companies will be limited to the foreign investment in the operating-cum-investing/ investing company. This exception has been made since the downstream investment of a 100% owned subsidiary of the holding company is akin to investment made by the holding company and the downstream investment should be a mirror image of the holding company. This exception, however, is strictly for those cases where the entire capital of the downstream subsidiary is owned by the holding company. ( .....

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t approval is required for foreign investment and in cases where there are any inter-se agreements between/amongst share-holders which have an effect on the appointment of the Board of Directors or on the exercise of voting rights or of creating voting rights disproportionate to shareholding or any incidental matter thereof, such agreements will have to be informed to the approving authority. The approving authority will consider such inter-se agreements for determining ownership and control whe .....

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, which are owned and controlled by resident Indian citizens. (a) For this purpose, the equity held by the largest Indian shareholder would have to be at least 51% of the total equity, excluding the equity held by Public Sector Banks and Public Financial Institutions, as defined in Section 4A of the Companies Act, 2013. The term largest Indian shareholder", used in this clause, will include any or a combination of the following: (aa) In the case of an individual shareholder, (aai) The indiv .....

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Indian or a relative as defined under Section 6 of the Companies Act, 2013/ HUF, either singly or in combination holding at least 51% of the shares. (c) Provided that, in case of a combination of all or any of the entities mentioned in sub-clauses (aa) and (ab) above, each of the parties shall have entered into a legally binding agreement to act as a single unit in managing the matters of the applicant company. (E) If a declaration is made by persons as per section 187C of the Indian Companies A .....

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e insurance sector which will continue to be governed by the relevant Regulation. D. Guidelines for establishment of Indian companies/ transfer of ownership or control of Indian companies, from resident Indian citizens and Indian companies to non-resident entities, in sectors with caps. 5. In sectors/activities with caps, including, inter-alia, defence production, air transport services, ground handling services, asset reconstruction companies, private sector banking, broadcasting, commodity exc .....

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d Indian companies, which are owned or controlled by resident Indian citizens, will be/is being transferred/passed on to a non-resident entity as a consequence of transfer of shares and/or fresh issue of shares to non-resident entities through amalgamation, merger/demerger, acquisition, etc. or (iv) The ownership of an existing Indian company, currently owned or controlled by resident Indian citizens and Indian companies, which are owned or controlled by resident Indian citizens, will be/is bein .....

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ude all types of direct foreign investments in the Indian company making downstream investment. For this purpose, portfolio investments either by FIIs, NRIs, QFIs or RFPIs holding as on March 31 of the previous year would be taken into account. e.g. for monitoring foreign investment for the financial year 2011-12, investment as on March 31, 2011 would be taken into account. Besides, investments in the form of Foreign Direct Investment, Foreign Venture Capital investment, investments in ADRs/GDRs .....

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into another Indian company, would be in accordance/compliance with the relevant sectoral conditions on entry route, conditionalities and caps, with regard to the sectors in which the latter Indian company is operating. Note: with effect from 31st day of July 2012 Downstream investment/s made by a banking company, as defined in clause (c) of Section 5 of the Banking Regulation Act, 1949, incorporated in India, which is owned and/or controlled by non-residents/a non-resident entity/non-resident e .....

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ream investments by Indian companies will be subject to the following conditions: (a) Such a company has to notify Secretariat for Industrial Assistance, DIPP and FIPB of its downstream investment in the form available at http://www.fipbindia.com within 30 days of such investment, even if capital instruments have not been allotted along with the modality of investment in new/existing ventures (with/without expansion programme); (b) downstream investment by way of induction of foreign equity in a .....

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ing companies, from raising debt in the domestic market. Downstream investments through internal accruals are permissible by an Indian company subject to the provisions above and as also elaborated below16: Foreign investment into an Indian company, engaged only in the activity of investing in the capital of other Indian company /ies, will require prior Government/FIPB approval, regardless of the amount or extent of foreign investment. Foreign investment into Non-Banking Finance Companies (NBFCs .....

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be required, regardless of the amount or extent of foreign investment. Further, as and when such a company commences business(s) or makes downstream investment, it will have to comply with the relevant sectoral conditions on entry route, conditionalities and caps. Note: Foreign investment into other Indian companies would be in accordance/compliance with the relevant sectoral conditions on entry route, conditionalities and caps. (e) The FDI recipient Indian company at the first level which is r .....

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tory auditor has certified that the company is in compliance with the regulations as regards downstream investment and other FEMA prescriptions will be duly mentioned in the Director s report in the Annual Report of the Indian company. In case statutory auditor has given a qualified report, the same shall be immediately brought to the notice of the Reserve Bank of India, Foreign Exchange Department (FED), Regional Office (RO) of the Reserve Bank in whose jurisdiction the Registered Office of the .....

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rtible/redeemable preference shares or debentures to non-resident shareholders, including the depositories that act as trustees for the ADR/GDR holders, by way of distribution as bonus from its general reserves under a Scheme of Arrangement approved by a Court in India under the provisions of the Companies Act, as applicable, subject to noobjection from the Income Tax Authorities. The above general permission to Indian companies is only for issue of non-convertible/ redeemable preference shares .....

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tnership (LLP) formed and registered under the Limited Liability Partnership Act, 2008 shall be eligible to accept Foreign Direct Investment (FDI) under Government approval route, subject to the conditions given in Annex B. Section - II: Foreign investments under Portfolio Investment Scheme (PIS) 1. Entities (i) Foreign Institutional Investors (FIIs) registered with SEBI are eligible to purchase shares, convertible debentures and warrants issued by Indian companies under the Portfolio Investment .....

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ry - I bank while granting permission to NRI for investment under PIS shall allow them to operate the scheme as per the terms and conditions at Annex A b) the AD Category - I bank shall provide to the Reserve Bank the complete contact details of such link office in advance before commencing operations; c) the AD Category - I bank shall sensitise the branches administering the Scheme to ensure that NRIs are not allowed to invest in any Indian company which is engaged or proposes to engage in the .....

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ent Rights (TDRs) and in sectors/ activities as specified in terms of Notification No. FEMA.1/2000-RB dated May 3, 2000, as amended from time to time; and d) ensure compliance with instructions issued through A.D.(M.A. Series) Circulars, EC.CO.FID circulars and the regulatory requirements under FEMA, 1999. (iii) SEBI approved sub accounts of FIIs (sub accounts) have general permission to invest under the PIS. (iv) OCBs are not permitted to invest under the PIS with effect from November 29, 2001, .....

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5. A registered FII including SEBI approved sub-accounts of the FIIs, after registering as RFPI shall not be eligible to invest as FII. However, all investments made by FII in accordance with the regulations prior to registration as RFPI shall continue to be valid and taken into account for computation of aggregate limit. 2. Investment in listed Indian companies A. 19FIIs (a) An Individual FII/ SEBI approved sub accounts of FIIs can invest up to a maximum of 10 per cent of the total paid-up capi .....

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Is put together shall not exceed 24 per cent of the paid-up capital or paid-up value of each series of convertible debentures. This limit of 24 per cent can be increased to the sectoral cap/statutory limit, as applicable to the Indian company concerned, by passing of a resolution by its Board of Directors, followed by a special resolution to that effect by its General Body which should necessarily be intimated to the Reserve Bank of India immediately as hitherto, along with certificate from the .....

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ue of each series of debentures of listed Indian companies. (c) The aggregate paid-up value of shares / convertible debentures purchased by all NRIs cannot exceed 10 per cent of the paid-up capital of the company / paid-up value of each series of debentures of the company. The aggregate ceiling of 10 per cent can be raised to 24 per cent by passing of a resolution by its Board of Directors followed by a special resolution to that effect by its General Body which should necessarily be intimated t .....

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; Regulation) Act, 1951 Both FIIs and NRIs are not allowed to invest in any company which is engaged or proposes to engage in the following activities: i) Business of chit fund*, or ii) Nidhi company, or iii) Agricultural or plantation activities, or iv) Real estate business** or construction of farm houses, or v) Trading in Transferable Development Rights (TDRs). * NRIs are eligible to to subscribe to the chit funds on non- repatriation basis **Real estate business" does not include constr .....

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c for making genuine investments in securities in terms of the SEBI (FII) Regulations, 1995 , as amended from time to time. The sums may be transferred from Foreign Currency Account to SNRR A/c at the prevailing market rate and the AD Category - I bank may transfer repatriable proceeds (after payment of tax) from the SNRR A/c to the Foreign Currency account. The SNRR A/c may be credited with the sale proceeds of shares / debentures, dated Government securities, Treasury Bills, etc. Such credits .....

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nd for payment of fees to applicant FIIs local Chartered Accountant / Tax Consultant where such fees constitute an integral part of their investment process. B. NRIs NRIs can approach the designated branch of any AD Category - I bank for permission to open a single designated account (NRE/NRO account) under the PIS for routing investments. Payment for purchase of shares and/or debentures on repatriation basis has to be made by way of inward remittance of foreign exchange through normal banking c .....

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e as well as the stipulations regarding collateral securities as directed by the Reserve Bank from time to time. The SEBI registered FII / sub-account may open a separate account under their SNRR A/c through which all receipts and payments pertaining to trading / investment in exchange traded derivative contracts will be made (including initial margin and mark to market settlement, transaction charges, brokerage, etc.). Further, transfer of funds between the SNRR A/c and the separate account mai .....

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Rupee funds held in India on non-repatriation basis, subject to the limits prescribed by SEBI. Such investments will not be eligible for repatriation benefits. 5. Collateral for FIIs a) Derivative Segment: FIIs are allowed to offer foreign sovereign securities with AAA rating, government securities and corporate bonds as collateral to the recognised Stock Exchanges in India in addition to cash for their transactions in derivatives segment of the market. SEBI approved clearing corporations of st .....

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the need arises. Clearing Corporations have to report, on a monthly basis, the balances of foreign sovereign securities, held by them as non-cash collaterals of their clearing members to the Reserve Bank. The report should be submitted by the 10th of the following month to which it relates. b) Equity Segment: The above guidelines are also applicable to the equity segment. Further, domestic Government Securities (subject to the overall limits specified by SEBI from time to time, the current limit .....

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owed to issue Irrevocable Payment Commitments (IPCs) in favour of Stock Exchanges / Clearing Corporations of the Stock Exchanges, on behalf of their FII clients for purchase of shares under the PIS. Issue of IPCs should be in accordance with the Reserve Bank regulations on banks' exposure to the capital market issued by the Reserve Bank from time to time and instructions issued vide DBOD Circular no. DBOD.Dir.BC. 46/13.03.00/2010-11 dated September 30, 2010. 6. Short Selling by FIIs A. FIIs .....

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ian companies which are in the ban list and / or caution list of the Reserve Bank. b) Borrowing of equity shares by FIIs shall only be for the purpose of delivery into short sales. c) The margin / collateral shall be maintained by FIIs only in the form of cash. No interest shall be paid to the FII on such margin/collateral. B. NRIs The NRI investor has to take delivery of the shares purchased and give delivery of shares sold. Short Selling is not permitted. 7. Private placement with FIIs SEBI re .....

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a) in the case of public offer, the price of shares to be issued is not less than the price at which shares are issued to residents; and b) in the case of issue by private placement, the issue price should be determined as per the pricing guidelines stipulated under the FDI scheme. 8. Transfer of shares acquired under PIS under private arrangement Shares purchased by NRIs and FIIs on the stock exchange under PIS cannot be transferred by way of sale under private arrangement or by way of gift to .....

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) and LEC (NRI). However, the respective designated bank (NRIs) / Custodian bank (FIIs) should monitor: the individual limit of NRI / RFPI to ensure that it does not breach the prescribed limits. that the trades are not undertaken in the prohibited sectors when the same is reported to them. that all trades are reported to them by monitoring the transactions in the designated account. The onus of reporting of RFPI and NRI transactions is on the designated custodian/AD bank, depository participant .....

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ith. 11. Caution List When the aggregate net purchases of equity shares of the Indian company by FIIs/NRIs/PIOs reaches the cut-off point of 2 per cent below the overall limit, the Reserve Bank cautions all the designated bank branches not to purchase any more equity shares of the respective company on behalf of any RFPIs/ FIIs/ NRIs/ PIOs without prior approval of the Reserve Bank. The link offices are then required to intimate the Reserve Bank about the total number and value of equity shares/ .....

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ve Bank places the company in the Ban List and advises all designated bank branches to stop purchases on behalf of their FIIs/ NRIs/ PIO clients. Once a company is placed in the Ban List, no FII/NRI can purchase the shares of the company under the PIS. The Reserve Bank also informs the general public about the caution and the stop purchase in the companies through a press release and an updated list regarding the same is placed on the RBI website 13. Issue of Irrevocable Payment Commitment (IPCs .....

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e following definition are allowed to make investments in all eligible securities for QFIs: (i) Definition - QFIs shall mean a person who fulfills the following criteria: (a) Resident in a country that is a member of Financial Action task Force (FATF) or a member of a group which is a member of FATF; and (b) Resident in a country that is a signatory to IOSCO s MMoU (Appendix A Signatories) or a signatory of a bilateral MoU with SEBI PROVIDED that the person is not resident in a country listed in .....

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gn Venture Capital Investor (FVCI). Explanation - For the purposes of this clause: (1) bilateral MoU with SEBI shall mean a bilateral MoU between SEBI and the overseas regulator that, inter alia, provides for information sharing arrangements. (2) Member of FATF shall not mean an associate member of FATF. ii) Eligible instruments and eligible transactions - QFIs shall be permitted to invest through SEBI registered Qualified Depository Participants (QDPs defined as per the extant SEBI regulations) .....

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subject to the investment limits as prescribed in para (v) below. QFIs shall be allowed to sell the equity shares so acquired by way of sale (a) Through recognized brokers on recognized stock exchanges in India; or (b) In an open offer in accordance with the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011; or (c) In an open offer in accordance with the SEBI (Delisting of Securities) Guidelines, 2009; or (d) Through buyback of shares by a listed Indian company in accorda .....

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ilized for purchase of eligible securities for QFIs or for remittance (net of taxes) outside India. The single non- interest bearing Rupee Account would be operated by QDP on behalf of QFI. (iv) Demat accounts - QFIs would be allowed to open a dedicated demat account with a QDP in India for investment in equity shares under the scheme. Each QFI shall maintain a single demat account with a QDP for all investments in eligible securities for QFIs in India. (v) Limits - The individual and aggregate .....

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The onus of monitoring and compliance of these limits shall remain jointly and severally with the respective QFIs, QDPs and the respective Indian companies (receiving such investment). (vi) KYC - QDPs will ensure KYC of the QFIs as per the norms prescribed by SEBI. AD Category-I banks will also ensure KYC of the QFIs for opening and maintenance of the single non- interest bearing Rupee accounts as per the extant norms. (vii) Permissible currencies - QFIs will remit foreign inward remittance thr .....

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unts) will also ensure reporting to the Reserve Bank of India in a manner and format as prescribed by the Reserve Bank of India from time to time. (x) Hedging - QFIs would be permitted to hedge their currency risk on account of their permissible investments (in equity and debt instruments) in terms of the guidelines issued by the Reserve Bank from time to time. A QFI may continue to buy, sell or otherwise deal in securities subject to SEBI (FPI) Regulations 2014, for a period of one year from th .....

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Portfolio Investment Scheme for Foreign Institutional Investor (FII) and Qualified Foreign Investor (QFI) have since been reviewed and it has been decided to put in place a framework for investments under a new scheme called Foreign Portfolio Investment scheme. (ii) The salient features of the new scheme are: • The portfolio investor registered in accordance with SEBI guidelines shall be called Registered Foreign Portfolio Investor (RFPI) . The existing portfolio investor class, namely, For .....

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rdance with the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011; or b. in an open offer in accordance with the SEBI (Delisting of Equity shares) Regulations, 2009; or c. through buyback of shares by a listed Indian company in accordance with the SEBI (Buy-back of securities) Regulations, 1998 o RFPI may also acquire shares or convertible debentures a. in any bid for, or acquisition of, securities in response to an offer for disinvestment of shares made by the Central Gov .....

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aid-up equity capital or 10% (per cent) or 24% (per cent) respectively of the paid-up value of each series of convertible debentures issued by an Indian company. Further, where there is composite sectoral cap under FDI policy, these limits for RFPI investment shall also be within such overall FDI sectoral caps; • RFPI shall be eligible to open a Special Non-Resident Rupee (SNRR) account and a foreign currency account with Authorised Dealer bank and to transfer sums from foreign currency acc .....

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ernment of India from time to time; • RFPI shall be permitted to trade in all exchange traded derivative contracts on the stock exchanges in India subject to the position limits as specified by SEBI from time to time; • RFPI may offer cash or foreign sovereign securities with AAA rating or corporate bonds or domestic Government Securities, as collateral to the recognized Stock Exchanges for their transactions in the cash as well as derivative segment of the market. (ii) Any foreign ins .....

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tions, or until he obtains a certificate of registration as foreign portfolio investor, whichever is earlier. However, all investments made by that FII/QFI in accordance with the regulations prior to registration as RFPI shall continue to be valid and taken into account for computation of aggregate limit. (iv). RFPI shall report the transaction to RBI as being reported by FII in LEC Form as per extant practice. Section - III: Foreign Venture Capital Investments Investments by Foreign Venture Cap .....

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incorporated in India whose shares are not listed on a recognized stock exchange in India and which is not engaged in an activity under the negative list specified by SEBI. A VCF is defined as a fund established in the form of a trust, a company including a body corporate and registered under the Securities and Exchange Board of India (Venture Capital Fund) Regulations, 1996 which has a dedicated pool of capital raised in a manner specified under the said Regulations and which invests in Ventur .....

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nded from time to time. (iv) (iv) At the time of granting approval, the Reserve Bank permits the FVCI to open a non-interest bearing Foreign Currency Account and/or a non-interest bearing Special Non-Resident Rupee Account with a designated branch of an AD Category - I bank, subject to certain terms and conditions. (v) A SEBI registered FVCI can acquire / sale securities (as given in (iii) above) by way of public offer or private placement by the issuer of such securities and /or by way of priva .....

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d May 3, 2000, as amended from time to time, would be governed by the norms as stated therein. Section - IV: Other Foreign Investments 1. Purchase of other securities by NRIs (i) On non-repatriation basis (a) NRIs can purchase shares, convertible debentures and warrants issued by an Indian company on non-repatriation basis without any limit. Amount of consideration for such purchase shall be paid by way of inward remittance through normal banking channels from abroad or out of funds held in NRE .....

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the scheme and the capital appreciation thereon will not be allowed to be repatriated abroad. NRIs can also invest in non-convertible debentures issued by an Indian Company, both on repatriation basis and on non-repatriation basis, subject to the other terms and conditions stated under Notification No FEMA 4/2000-RB dated May 3,2000 (as amended from time to time). 21NRIs may also invest, both on repatriation and non-repatriation basis, in nonconvertible/redeemable preference shares or debenture .....

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e notice inviting bids. 2. Indian Depository Receipts (IDR) Indian Depository Receipts (IDRs) can be issued by non resident companies in India subject to and under the terms and conditions of Companies (Issue of Depository Receipts) Rules, 2004 and subsequent amendment made thereto and the SEBI (ICDR) Regulations, 2000, as amended from time to time. These IDRs can be issued in India through Domestic Depository to residents in India as well as SEBI registered FIIs/Registerd Foreign Portfolio Inve .....

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b) RFPIs, Foreign Institutional Investors (FIIs) including SEBI approved sub-accounts of the FIIs, registered with SEBI and Non-Resident Indians (NRIs) may invest, purchase, hold and transfer IDRs of eligible companies resident outside India and issued in the Indian capital market, subject to the Foreign Exchange Management (Transfer or Issue of Security by a Person Resident Outside India) Regulations, 2000 notified vide Notification No. FEMA 20 / 2000-RB dated May 3, 2000, as amended from time .....

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ts) Regulations, 2009, as amended from time to time as well as other relevant guidelines issued in this regard by the Government, the SEBI and the RBI from time to time. d) IDRs shall not be redeemable into underlying equity shares before the expiry of one year period from the date of issue of the IDRs. e) At the time of redemption / conversion of IDRs into underlying shares, the Indian holders (persons resident in India) of IDRs shall comply with the provisions of the Foreign Exchange Managemen .....

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ds, registered with SEBI may either sell or continue to hold the underlying shares subject to the terms and conditions as per Regulation 6C of Notification No. FEMA 120/RB-2004 dated July 7, 2004, as amended from time to time. iii. Other persons resident in India including resident individuals are allowed to hold the underlying shares only for the purpose of sale within a period of 30 days from the date of conversion of the IDRs into underlying shares. iv. The FEMA provisions shall not apply to .....

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/treasury bills, listed non-convertible debentures/bonds, commercial papers issued by Indian companies and units of domestic mutual funds, to be listed NCDs/ bonds only if listing of such NCDs/bonds is committed to be done within 15 days of such investment, Security receipts issued by Asset Reconstruction Companies and Perpetual Debt Instruments eligible for inclusion in as Tier I capital (as defined by DBOD, RBI) and Debt capital instruments as upper Tier II Capital (as defined by DBOD, RBI) is .....

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rpetual Debt Instruments (Tier I) shall not exceed 10% of the issue and total holdings of all FIIs / sub-account put together shall not exceed 49% of the paid up value of each issue of Perpetual Debt Instruments. c) Purchase of debt instruments including Upper Tier II instruments by FIIs are subject to limits notified by SEBI and the Reserve Bank from time to time. 23 The above class of investors may also invest in non-convertible/redeemable preference shares or debentures permitted in complianc .....

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d June 26, 2013, up to a limit of USD 5 billion within the overall limit of USD 51 billion earmarked for corporate debt. In terms of A.P. (DIR Series) circular dated June 26, 2013, credit enhancement can be provided by eligible non-resident entities to the domestic debt raised through issue of INR bonds/ debentures by all borrowers eligible to raise ECB under the automatic route. All the other terms and conditions mentioned in para 4 (iv)[guarantee fee and other cost], (vi)[applicable rate of in .....

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shall be required to be made in corporate bonds with a minimum residual maturity of three years. FPIs shall not be allowed to make any further investment in liquid and money market mutual fund schemes.25 FPIs shall not be allowed to make any further investment in CPs.26 The present limit for investment by SEBI registered FIIs, QFIs, long term investors and RFPIs in Government securities including Treasury Bills is USD 30 billion. Within USD 30 billion, a sub-limit of USD 1027 billion is availab .....

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. The incremental investment limit of USD 5 billion shall be required to be invested in government bonds with a minimum residual maturity of three years. Further, all future investment against the limit vacated when the current investment by an FII/QFI/FPI runs off either through sale or redemption shall also be required to be made in government bonds with a minimum residual maturity of three years. It is, however, clarified that there will be no lock-in period and FIIs/QFIs/FPIs shall be free t .....

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nt Banks (MDBs) A Multilateral Development Bank (MDB) which is specifically permitted by the Government of India to float rupee bonds in India can purchase Government dated securities. 5. Foreign Investment in Tier I and Tier II instruments issued by banks in India (i) FIIs registered with SEBI and NRIs have been permitted to subscribe to the Perpetual Debt instruments (eligible for inclusion as Tier I capital) and Debt Capital instruments (eligible for inclusion as upper Tier II capital), issue .....

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s by a single NRI should not exceed 5 percent of each issue. c. Investment by FIIs in Rupee denominated Debt Capital instruments (Tier II) shall be within the limits stipulated by SEBI for FII investment in corporate debt instruments. d. Investment by NRIs in Rupee denominated Debt Capital instruments (Tier II) shall be in accordance with the extant policy for investment by NRIs in other debt instruments. (ii) The issuing banks are required to ensure compliance with the conditions stipulated abo .....

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II Instruments raised in Indian Rupees will be within the limit prescribed by SEBI for investment in corporate debt instruments. However, investment by FIIs in these instruments will be subject to a separate ceiling of USD 500 million. (v) The details of the secondary market sales / purchases by RFPIs, FIIs and the NRIs in these instruments on the floor of the stock exchange are to be reported by the custodians and designated banks respectively, to the Reserve Bank through the soft copy of the .....

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FIs may invest in rupee denominated units of equity schemes of SEBI registered domestic MFs under the two routes, namely: (i) Direct Route - SEBI registered Qualified Depository Participant (QDP) route - o The QDP route will be operated through single non-interest bearing Rupee account to be maintained with an AD Category I Bank in India. The foreign inward remittances in to the single non-interest bearing Rupee account shall be received only in permissible currency. (ii) Indirect Route - Unit C .....

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ce Minister in his budget speech for 2011-12 had announced setting up of Infrastructure Debt Funds (IDFs). Government vide press release dated June 24, 2011 notified the broad structure of the proposed IDFs. The summarized position is given as under: (i) SWFs, Multilateral Agencies, Pension Funds, Insurance Funds and Endowment Funds -registered with SEBI, FIIs/RFPIs, NRIs, QFIs would be the eligible class non- resident investors which will be investing in IDFs. (ii) Eligible non-resident investo .....

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Currency & Rupee denominated Bonds and Rupee denominated Units; (iv) The facility of Foreign exchange hedging would be available to non-resident IDF investors, IDFs as well as infrastructure project companies exposed to the foreign exchange/ currency risk. 8. Purchase of other securities by QFIs QFIs can invest through SEBI registered Qualified Depository Participants (QDPs) (defined as per the extant SEBI regulations) in eligible corporate debt instruments, viz. listed Non-Convertible Deben .....

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ugh registered stock broker on a recognized stock exchange in India or by way of buyback or redemption by the issuer. Further, QFIs can also invest in Security Receipts issued by Asset Reconstruction Companies provided that the total holding by an individual QFI in each tranche of scheme of Security Receipts shall not exceed 10 per cent of the issue and the total holdings of all eligible investors put together shall not exceed 49 per cent of the paid up value of each tranche of scheme of Securit .....

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individual QFI shall not exceed the limit of 10 per cent of each issue; listed and unlisted non-convertible debentures/bonds issued by an Indian company in the infrastructure sector, where infrastructure is defined in terms of the extant ECB guidelines; non-convertible debentures / bonds issued by Non-Banking Finance Companies categorized as Infrastructure Finance Companies (IFCs) by the Reserve Bank; credit enhanced bonds and listed nonconvertible/redeemable preference shares or debentures iss .....

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ts under the FDI Scheme, should report the details of the amount of consideration (including each upfront/call payment) to the Regional Office concerned of the Reserve Bank through it s AD Category I bank, not later than 30 days from the date of receipt in the Advance Reporting Form enclosed in Annex - 6. Non-compliance with the above provision would be reckoned as a contravention under FEMA, 1999 and could attract penal provisions. The Form can also be downloaded from the Reserve Bank's web .....

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ed by the Regional Office concerned, which will allot a Unique Identification Number (UIN) for the amount reported. (ii) Annual Return on Foreign Liabilities and Assets - All Indian companies which have received FDI and/or made FDI abroad in the previous year(s) including the current year, should file the annual return on Foreign Liabilities and Assets (FLA) in the soft form to the Reserve Bank, Department of Statistics and Information Management, Mumbai by July 15 every year. In order to collec .....

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issued within 180 days from the date of receipt of the inward remittance or by debit to the NRE/FCNR (B) /Escrow account of the non-resident investor. In case, the equity instruments are not issued within 180 days from the date of receipt of the inward remittance or date of debit to the NRE/FCNR (B) account, the amount of consideration so received should be refunded immediately to the non-resident investor by outward remittance through normal banking channels or by credit to the NRE/FCNR (B)/Es .....

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on conversion of stock option under ESOP scheme)/ partly paid shares to the extent equity shares are called up/ convertible debentures / convertible preference shares/warrants to the extent equity shares are called up, the Indian company has to file Form FC-GPR, enclosed in Annex - 8, through it s AD Category I bank, not later than 30 days from the date of issue of shares. The Form can also be downloaded from the Reserve Bank's website http://rbidocs.rbi.org.in/rdocs/Forms/PDFs/AP110214_ANN .....

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ying that: a) all the requirements of the Companies Act, 2013 have been complied with; b) terms and conditions of the Government s approval, if any, have been complied with; c) the company is eligible to issue shares under these Regulations; and d) the company has all original certificates issued by AD banks in India evidencing receipt of amount of consideration. (ii) A certificate from SEBI registered Merchant Banker or Chartered Accountant indicating the manner of arriving at the price of the .....

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hares on conversion of ECB/royalty/lumpsum technical know-how fee / import of capital goods by units in SEZs has to be reported in Form FC-GPR. 2. Reporting of FDI for Transfer of shares (i) The actual inflows and outflows on account of such transfer of shares shall be reported by the AD branch in the R-returns in the normal course. (ii) Reporting of transfer of shares/ convertible debentures and partly paid shares and warrants to the extent the equity shares are called upbetween residents and n .....

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Acquisition of Shares and Takeover) Regulations shall be on the investee company. AD Category-I bank shall approach Regional Office concerned of Reserve Bank of India, Foreign Exchange Department to regularize the delay in submission of form FC-TRS, beyond the prescribed period of 60 days and in all other cases, form FC-TRS shall continue to be scrutinised at AD bank level as per extant practice. (iii) The sale consideration in respect of equity instruments purchased by a person resident outside .....

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ng with the Form FC-TRS. (iv) The AD bank should scrutinise the transactions and on being satisfied about the transactions should certify the form FC-TRS as being in order. (v) The AD bank branch should submit two copies of the Form FC-TRS received from their constituents/customers together with the statement of inflows/outflows on account of remittances received/made in connection with transfer of shares, by way of sale, to IBD/FED/or the nodal office designated for the purpose by the bank in t .....

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rms with it and should not forward the same to the Reserve Bank of India. (vi) The transferee/his duly appointed agent should approach the investee company to record the transfer in their books along with the certificate in the Form FC-TRS from the AD branch that the remittances have been received by the transferor/payment has been made by the transferee. On receipt of the certificate from the AD, the company may record the transfer in its books. (vii) On receipt of statements from the AD bank , .....

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k as well as in Form ECB-2 to the Department of Statistics and Information Management (DSIM), Reserve Bank of India, Bandra-Kurla Complex, Mumbai -400 051, within seven working days from the close of month to which it relates. The words "ECB wholly converted to equity" shall be clearly indicated on top of the Form ECB-2. Once reported, filing of Form ECB-2 in the subsequent months is not necessary. b. In case of partial conversion of ECB, the company shall report the converted portion .....

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f ESOPs for allotment of equity shares The issuing company is required to report the details of issuance of ESOPs to its employees to the Regional Office concerned of the Reserve Bank, in plain paper reporting, within 30 days from the date of issue of ESOPs. Further, at the time of conversion of options into shares the Indian company has to ensure reporting to the Regional Office concerned of the Reserve Bank in form FC-GPR, within 30 days of allotment of such shares. 5. Reporting of ADR/GDR Iss .....

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ions details (except derivative and IDRs) in the Form LEC (FII) to Foreign Exchange Department, Reserve Bank of India, Central Office by uploading the same to the ORFS web site (https://secweb.rbi.org.in/ORFSMainWeb/Login.jsp). It would be the bank s responsibility to ensure that the data submitted to RBI is reconciled by periodically taking a FII holding report for their bank. (iii) The Indian company which has issued shares to FIIs under the FDI Scheme (for which the payment has been received .....

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Category - I bank shall furnish to the Reserve Bank32, a report on a daily basis on PIS transactions undertaken on behalf of NRIs for their entire bank. This report can be uploaded directly on the ORFS web site (https://secweb.rbi.org.in/ORFSMainWeb/Login.jsp). It would be the banks responsibility to ensure that the data submitted to RBI is reconciled by periodically taking a NRI holding report for their bank. 8. Reporting of foreign investment by way of issue/transfer of participating interest/ .....

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a 4 of Form FC-GPR as given in the Annex-9. Part II Investment in Partnership Firm / Proprietary Concern 1. Investment in Partnership Firm / Proprietary Concern A Non-Resident Indian33 (NRI) or a Person of Indian Origin34 (PIO) resident outside India can invest by way of contribution to the capital of a firm or a proprietary concern in India on non-repatriation basis provided: i. Amount is invested by inward remittance or out of NRE / FCNR(B) / NRO account maintained with Authorised Dealers / Au .....

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iation benefits. The application will be decided in consultation with the Government of India. 3. Investment by non-residents other than NRIs/PIO A person resident outside India other than NRIs/PIO may make an application and seek prior approval of Reserve Bank36, for making investment by way of contribution to the capital of a firm or a proprietorship concern or any association of persons in India. The application will be decided in consultation with the Government of India. 4. Restrictions An .....

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n a recognized stock exchange in India will apply in prescribed form to the designated branch of AD bank for participating in the Scheme on repatriation and/or non-repatriation basis. b) While applying, the NRI should also undertake that i) the particulars furnished are true and correct; ii) he has no dealing with/ he will not deal with any other designated branch/bank under PIS; iii) he will ensure that total holding in shares /convertible debentures, both on repatriation and non-repatriation b .....

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arate sub account of NRE/NRO account (opened and maintained by an NRI in terms of the Foreign Exchange Management (Deposit) Regulations, 2000 for the exclusive purpose of routing the transactions under PIS on behalf of an NRI. NRE (PIS) account for investment made by the NRI on repatriation basis and NRO (PIS) account for investment made on non-repatriation basis under the Scheme. The designated branch shall ensure that amounts due to sale proceeds of shares/convertible debentures which have bee .....

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issible credits and debits in the NRE (PIS) account for routing PIS transactions will be as under: Permissible Credits (i) Inward remittances in foreign exchange though normal banking channels; (ii) Transfer from applicant s other NRE accounts or FCNR (B) accounts maintained with AD bank in India ; (iii) Net sale proceeds (after payment of applicable taxes) of shares and convertible debentures which were acquired on repatriation basis under PIS and sold on stock exchange through registered broke .....

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issible Credits (i) Inward remittances in foreign exchange though normal banking channels; (ii) Transfer from applicant s other NRE accounts or FCNR (B) accounts or NRO accounts maintained with AD bank in India; (iii) Net sale proceeds (after payment of applicable taxes) of shares and convertible debentures which were acquired on repatriation (at the NRI s option) and non repatriation basis under PIS and sold on stock exchange through registered broker; and (iv) dividend or income earned on inve .....

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capital of the company subject to an overall ceiling of 10 per cent of the total paid-up capital of the company concerned by all NRIs both on repatriation and non-repatriation basis taken together. h) The purchase of convertible debentures of each series of an Indian company both repatriation and non-repatriation basis by each NRI shall not exceed 5 per cent of the total paid -up value of convertible debentures subject to an overall ceiling of 10 per cent of the total paid -up value of each ser .....

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and convertible debentures purchased and give the delivery of the shares and debentures sold. k) Shares/convertible debentures acquired by the NRI under the Scheme shall not be transferred out of his name by way of gift except to his close relatives as defined in Section 6 of the Companies Act, 2013, as amended from time to time or Charitable Trust duly registered under the laws in India with prior approval of AD bank Shares /convertible debentures acquired by the NRI under the Scheme shall not .....

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ubmitted by the NRI within 24/48 hours of execution of the contract to his designated branch with whom his PIS account is maintained. The onus is on the NRI for submission of contract notes to the designated branch of the AD bank. n) NRI is at a liberty to change the designated branch / AD bank. The designated branch / AD bank from whom the PIS account is being transferred should i) issue no objection certificate to the new designated branch / AD bank ii) furnish the list of all the existing hol .....

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ited Liability Partnerships (LLPs) 1. Eligible Investors: A person resident outside India or an entity incorporated outside India shall be eligible investor for the purpose of FDI in LLPs. However, the following persons shall not be eligible to invest in LLPs: (i) a citizen/entity of Pakistan and Bangladesh or (ii) a SEBI registered Foreign Institutional Investor (FII) or (iii) a SEBI registered Foreign Venture Capital Investor (FVCI) or (iv) a SEBI registered Qualified Foreign Investor (QFI) or .....

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d May 2000, as amended from time to time. (ii) An LLP engaged in the following sectors/activities shall not be eligible to accept FDI: a) Sectors eligible to accept 100% FDI under automatic route but are subject to FDI-linked performance related conditions (for example minimum capitalisation norms applicable to 'Non-Banking Finance Companies' or 'Development of Townships, Housing, Built-up infrastructure and Construction-development projects', etc.); or b) Sectors eligible to acc .....

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ime to time. 3. Eligible investment: Contribution to the capital of a LLP would be an eligible investment under the Scheme. Note: Investment by way of profit share will fall under the category of reinvestment of earnings 4. Entry Route: Any FDI in a LLP shall require prior Government/FIPB approval. Any form of foreign investment in an LLP, direct or indirect (regardless of nature of ownership or control of an Indian Company) shall require Government/FIPB approval. 5. Pricing: FDI in an LLP eithe .....

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ined by the Central Government. In case of transfer of capital contribution/profit share from a resident to a non-resident, the transfer shall be for a consideration equal to or more than the fair price of capital contribution/profit share of an LLP. Further, in case of transfer of capital contribution/profit share from a non-resident to a resident, the transfer shall be for a consideration which is less than or equal to the fair price of the capital contribution/profit share of an LLP. 6. Mode .....

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on for capital contribution and profit shares in Form FOREIGN DIRECT INVESTMENT-LLP(I) as given in Annex 11, together with a copy/ies of the FIRC/s evidencing the receipt of the remittance along with the KYC report on the non-resident investor in Annex 9-II (, through an AD Category - I bank, and valuation certificate (as per paragraph 5 above) as regards pricing at the earliest but not later than 30 days from the date of receipt of the amount of consideration. The report would be acknowledged b .....

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IGN DIRECT INVESTMENT-LLP(II) as given in Annex 12. 8. Downstream investment: a) An Indian company, having foreign investment (direct or indirect, irrespective of percentage of such foreign investment), will be permitted to make downstream investment in an LLP only if both, the company as well as the LLP, are operating in sectors where 100% FDI is allowed under the automatic route and there are no FDI-linked performance related conditions. Onus shall be on the LLP accepting investment from the I .....

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ty Partnership Act, 2008, such a body corporate should only be a company registered in India under the provisions of the Companies Act, as applicable and not any other body, such as an LLP or a Trust. For such LLPs, the designated partner "resident in India", as defined under the 'Explanation' to Section 7(1) of the Limited Liability Partnership Act, 2008, would also have to satisfy the definition of "person resident in India", as prescribed under Section 2(v)(i) of t .....

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gs (ECBs). Annex - 1 (PART I, Section I, para 7(a)) Sector-specific policy for foreign investment In the following sectors/activities, FDI up to the limit indicated against each sector/activity is allowed, subject to applicable laws/ regulations; security and other conditionalities. In sectors/activities not listed below, FDI is permitted upto 100% on the automatic route, subject to applicable laws/regulations; security and other conditionalities. Wherever there is a requirement of minimum capit .....

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Automatic Horticulture, Apiculture and Cultivation of Vegetables & Mushrooms under controlled conditions; b) Development and production of Seeds and planting material; c) Animal Husbandry (including breeding of dogs), Pisciculture, Aquaculture, under controlled conditions; and d) services related to agro and allied sectors Note: Besides the above, FDI is not allowed in any other agricultural sector/activity 100% Automatic 1.1 Other Conditions : I. For companies dealing with development of tr .....

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shall comply with any other Law, Regulation or Policy governing genetically modified material in force from time to time. (iv) Undertaking of business activities involving the use of genetically engineered cells and material shall be subject to the receipt of approvals from Genetic Engineering Approval Committee (GEAC) and Review Committee on Genetic Manipulation (RCGM). (v) Import of materials shall be in accordance with National Seeds Policy. II. The term under controlled conditions covers the .....

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anthropogenically. (ii) In case of Animal Husbandry, scope of the term under controlled conditions covers - (a) Rearing of animals under intensive farming systems with stall-feeding. Intensive farming system will require climate systems (ventilation, temperature/humidity management), health care and nutrition, herd registering/pedigree recording, use of machinery, waste management systems as prescribed by the National Livestock Policy 2013 and in conformity with the existing Standard Operating .....

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e term under controlled conditions covers -Production of honey by bee-keeping, except in forest/wild, in designated spaces with control of temperatures and climatic factors like humidity and artificial feeding during lean seasons. 2 Tea Plantation Tea sector including tea plantations Note: Besides the above, FDI is not allowed in any other plantation sector/activity 100% Government 2.2 Other Condition : Prior approval of the State Government concerned in case of any future land use change.39 3 M .....

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3 100% Automatic (2) Setting up coal processing plants like washeries, subject to the condition that the company shall not do coal mining and shall not sell washed coal or sized coal from its coal processing plants in the open market and shall supply the washed or sized coal to those parties who are supplying raw coal to coal processing plants for washing or sizing. 100% Automatic 3.3 Mining and mineral separation of titanium bearing minerals and ores, its value addition and integrated activitie .....

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which have been classified as prescribed substances under the Atomic Energy Act, 1962. Under the Industrial Policy Statement 1991, mining and production of minerals classified as prescribed substances and specified in the Schedule to the Atomic Energy (Control of Production and Use) Order, 1953 were included in the list of industries reserved for the public sector. Vide Resolution No. 8/1(1)/97-PSU/1422 dated 6th October 1998 issued by the Department of Atomic Energy laying down the policy for .....

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minerals/concentrates including Zircon, were removed from the list of prescribed substances . (i) FDI for separation of titanium bearing minerals & ores will be subject to the following additional conditions viz.: (A) value addition facilities are set up within India along with transfer of technology; (B) disposal of tailings during the mineral separation shall be carried out in accordance with regulations framed by the Atomic Energy Regulatory Board such as Atomic Energy (Radiation Protect .....

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ag as an intermediate value added product. (2) The objective is to ensure that the raw material available in the country is utilized for setting up downstream industries and the technology available internationally is also made available for setting up such industries within the country. Thus, if with the technology transfer, the objective of the FDI Policy can be achieved, the conditions prescribed at (i) (A) above shall be deemed to be fulfilled. 4 Petroleum & Natural Gas Exploration activ .....

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the discovered fields of national oil companies 100% Automatic 4.2 Petroleum refining by the Public Sector Undertakings (PSU), without any disinvestment or dilution of domestic equity in the existing PSUs. 49% Automatic40 MANUFACTURING 5 Manufacture of items reserved for production in Micro and Small Enterprises (MSEs) 5.1 FDI in MSEs [as defined under Micro, Small And Medium Enterprises Development Act, 2006 (MSMED, Act 2006)] will be subject to the sectoral caps, entry routes and other relevan .....

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l Undertaking shall undertake to export a minimum of 50% of the new or additional annual production of the MSE reserved items to be achieved within a maximum period of three years. The export obligation would be applicable from the date of commencement of commercial production and in accordance with the provisions of section 11 of the Industries (Development & Regulation) Act 1951 6 DEFENCE 6.1 Defence Industry subject to Industrial license under the Industries (Development & Regulation) .....

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d Qualified Foreign Investors (QFIs) regardless of whether the said investments have been made under Schedule 1 (FDI), 2 (FII), 2A (FPI), 3 (NRI), 6 (FVCI) and 8 (QFI) of FEMA (Transfer or Issue of Security by Persons Resident Outside India) Regulations. (ii) Portfolio investment by FPIs/FIls/NRIs/QFIs and investments by FVCIs together will not exceed 24% of the total equity of the investee/joint venture company. Portfolio investments will be under automatic route. 6.2 Other conditions: i. Licen .....

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as the Chief Executives of the company/partnership firm being resident Indians. iv. Chief Security Officer (CSO) of the investee/ joint venture company should be resident Indian citizen. v. Full particulars of the Directors and the Chief Executives should be furnished along with the applications. vi. The Government reserves the right to verify the antecedents of the foreign collaborators and domestic promoters including their financial standing and credentials in the world market. Preference wo .....

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of the non-resident investor taking into account the category of weapons and equipment that are proposed to be manufactured. viii. The Ministry of Defence is not in a position to give purchase guarantee for products to be manufactured. However, the planned acquisition programme for such equipment and overall requirements would be made available to the extent possible. ix. The capacity norms for production will be provided in the licence based on the application as well as the recommendations of .....

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ompany would be permitted. xii. Adequate safety and security procedures would need to be put in place by the licensee once the licence is granted and production commences. These would be subject to verification by authorized Government agencies. xiii. The standards and testing procedures for equipment to be produced under licence from foreign collaborators or from indigenous R & D will have to be provided by the licensee to the Government nominated quality assurance agency under appropriate .....

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o the Public Sector organizations as per guidelines of the Department of Public Enterprises. xv. Arms and ammunition produced by the private manufacturers will be primarily sold to the Ministry of Defence. These items may also be sold to other Government entities under the control of the Ministry of Home Affairs and State Governments with the prior approval of the Ministry of Defence. No such item should be soldwithin the country to any other person or entity. The export of manufactured items wo .....

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e Government for FDI in defence would be made to the Secretariat of Foreign Investment Promotion Board (FIPB) in the Department of Economic Affairs. xvii. Applications for FDI up to 49% will follow the existing procedure with proposals involving inflows in excess of ₹ 1200 crore being approved by Cabinet Committee on Economic Affairs (CCEA). xviii. Based on the recommendation of the Ministry of Defence and FIPB, approval of the Cabinet Committee on Security (CCS) will be sought by the Mini .....

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within a time frame of 10 weeks from the date of acknowledgement. xxi. For the proposal seeking Government approval for foreign investment beyond 49% applicant should be Indian company/foreign investor. Further condition at para (iii) above will not apply on such proposals SERVICES SECTOR INFORMATION SERVICES 7 Broadcasting 7.1 Broadcasting Carriage Services 7.1.1 (1) Teleports(setting up of up-linking HUBs/Teleports); (2) Direct to Home(DTH); (3) Cable Networks(Multi System operators (MSOs) op .....

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io), subject to such terms and conditions, as specified from time to time, by Ministry of Information & Broadcasting, for grant of permission for setting up of FM Radio stations. 26% Government 7.2.2 Up-linking of 'News & Current Affairs' TV Channels 26% Government 7.2.3 Up-linking of Non- News & Current Affairs TV Channels / Down- linking of TV Channels 100% Government 7.3 FDI for Up-linking/Down-linking TV Channels will be subject to compliance with the relevant Up-linking/ .....

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nvestors (FIls), Foreign Portfolio Investors(FPIs), Qualified Foreign Investors (QFIs),Non-Resident Indians (NRIs), Foreign Currency Convertible Bonds (FCCBs), American Depository Receipts (ADRs), Global Depository Receipts (GDRs) and convertible preference shares held by foreign entities.42 7.6 Foreign investment in the aforestated broadcasting carriage services will be subject to the following security conditions/terms: Mandatory Requirement for Key Executives of the Company (i) The majority o .....

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ficer (COO), shareholders who individually hold 10% or more paid-up capital in the company and any other category, as may be specified by the Ministry of Information and Broadcasting from time to time, shall require to be security cleared. In case of the appointment of Directors on the Board of the Company and such key executives like Managing Director / Chief Executive Officer, Chief Financial Officer (CFO), Chief Security Officer (CSO), Chief Technical Officer (CTO), Chief Operating Officer (C .....

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than 60 days in a year by way of appointment, contract, and consultancy or in any other capacity for installation, maintenance, operation or any other services prior to their deployment. The security clearance shall be required to be obtained every two years.43 Permission vis-a-vis Security Clearance (v) The permission shall be subject to permission holder/licensee remaining security cleared throughout the currency of permission. In case the security clearance is withdrawn the permission granted .....

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y such Permission/license in future for a period of five years. Infrastructure/Network/Software related requirement (vii) The officers/officials of the licensee companies dealing with the lawful interception of Services will be resident Indian citizens. (viii) Details of infrastructure/network diagram (technical details of the network) could be provided, on a need basis only, to equipment suppliers/manufactures and the affiliate of the licensee company. Clearance from the licensor would be requi .....

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n as and when required by Government. (xii) The company, at its own costs, shall, on demand by the government or its authorized representative, provide the necessary equipment, services and facilities at designated place(s) for continuous monitoring or the broadcasting service by or under supervision of the Government or its authorized representative. (xiii) The Government of India, Ministry of Information & Broadcasting or its authorized representative shall have the right to inspect the br .....

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content. (xiv) (xiv) The inspection will ordinarily be carried out by the Government of India, Ministry of Information & Broadcasting or its authorized representative after reasonable notice, except in circumstances where giving such a notice will defeat the very purpose of the inspection. (xv) The company shall submit such information with respect to its services as may be required by the Government or its authorized representative, in the format as may be required, from time to time. (xvi .....

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eir systems. National Security Conditions (xviii) It shall be open to the licensor to restrict the Licensee Company from operating in any sensitive area from the National Security angle. The Government of India, Ministry of Information and Broadcasting shall have the right to temporarily suspend the permission of the permission holder/Licensee in public interest or for national security for such period or periods as it may direct. The company shall immediately comply with any directives issued i .....

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provision of broadcasting services. (xxi) Licensee will ensure that broadcasting service installation carried out by it should not become a safety hazard and is not in contravention of any statute, rule or regulation and public policy. 8 Print Media 8.1 Publishing of Newspaper and periodicals dealing with news and current affairs 26% (FDI and investment by NRIs/PIOs/FII/RFPI) Government 8.2 Publication of Indian editions of foreign magazines dealing with news and current affairs 26% (FDI and inv .....

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f Scientific and Technical Magazines/specialty journals/periodicals, subject to compliance with the legal framework as applicable and guidelines issued in this regard from time to time by Ministry of Information and Broadcasting. 100% Government 8.4 Publication of facsimile edition of foreign newspapers. 100% Government 8.4.1 Other Conditions: (i) FDI should be made by the owner of the original foreign newspapers whose facsimile edition is proposed to be brought out in India. (ii) Publication of .....

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. 9 Civil Aviation 9.1 The Civil Aviation sector includes Airports, Scheduled and Non-Scheduled domestic passenger airlines, Helicopter services/Seaplane services, Ground Handling Services, Maintenance and Repair organizations; Flying training institutes; and Technical training institutions. For the purposes of the Civil Aviation sector: (i) Airport means a landing and taking off area for aircrafts, usually with runways and aircraft maintenance and passenger facilities and includes aerodrome as .....

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whatsoever, whether such service consists of a single flight or series of flights; (iv)"Air Transport Undertaking" means an undertaking whose business includes the carriage by air of passengers or cargo for hire or reward; (v) "Aircraft component" means any part, the soundness and correct functioning of which, when fitted to an aircraft, is essential to the continued airworthiness or safety of the aircraft and includes any item of equipment; (vi)"Helicopter" means a .....

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port service means any service which is not a scheduled air transport service and will include Cargo airlines; ix) Cargo airlines would mean such airlines which meet the conditions as given in the Civil Aviation Requirements issued by the Ministry of Civil Aviation; (x) "Seaplane" means an aeroplane capable normally of taking off from and alighting solely on water; (xi) Ground Handling means (i) ramp handling , (ii) traffic handling both of which shall include the activities as specifi .....

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ed Air Transport Service 74% FDI (100% for NRIs) Automatic upto 49% Government route beyond 49% and up to 74% (3) Helicopter services/seaplane services requiring DGCA approval 100% Automatic 9.3.1 Other Conditions (a) Air Transport Services would include Domestic Scheduled Passenger Airlines; Non-Scheduled Air Transport Services, helicopter and seaplane services. (b) Foreign airlines are allowed to participate in the equity of companies operating Cargo airlines, helicopter and seaplane services, .....

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regulations of SEBI, such as the Issue of Capital and Disclosure Requirements (ICDR) Regulations/Substantial Acquisition of Shares and Takeovers (SAST) Regulations, as well as other applicable rules and regulations. (iv) A Scheduled Operator's Permit can be granted only to a company: a) that is registered and has its principal place of business within India; b) the Chairman and at least two-thirds of the Directors of which are citizens of India; and c) the substantial ownership and effectiv .....

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ph 9.3(1) and 9.3(2) above, are applicable in the situation where there is no investment by foreign airlines. (ii) The dispensation for NRIs regarding FDI up to 100% will also continue in respect of the investment regime specified at paragraph 9.3.1(c)(ii) above. (iii) The policy mentioned at paragraph 9.3.1(c) above is not applicable to M/s Air India Limited. 9.4 Other services under Civil Aviation sector (1) Ground Handling Services subject to sectoral regulations and security clearance 74% FD .....

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Construction-development Projects (which would include development of townships, construction of residential/commercial premises, roads or bridges, hotels, resorts, hospitals, educational institutions, recreational facilities, city and regional level infrastructure, townships).46 100% Automatic 11.2 Investment will be subject to the following conditions: (A) Minimum area to be developed under each project would be as under: i. In case of development of serviced plots, no minimum land area requi .....

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, whichever expires earlier. (C) (i) The investor will be permitted to exit on completion of the project or after development of trunk infrastructure i.e. roads, water supply, street lighting, drainage and sewerage. (ii)The Government may, in view of facts and circumstances of a case, permit repatriation of FDI or transfer of stake by one non-resident investor to another non-resident investor, before the completion of project. These proposals will be considered by FIPB on case to case basis inte .....

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plots where trunk infrastructure i.e. roads, water supply, street lighting, drainage and sewerage, have been made available. (F) The Indian investee company shall be responsible for obtaining all necessary approvals, including those of the building/layout plans, developing internal and peripheral areas and other infrastructure facilities, payment of development, external development and other charges and complying with all other requirements as prescribed under applicable rules/bye- laws/regulat .....

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eaning as provided in FEMA Notification No. 1/2000-RB dated May 03, 2000 read with RBI Master Circular i.e. dealing in land and immovable property with a view to earning profit or earning income there from and does not include development of townships, construction of residential/ commercial premises, roads or bridges, educational institutions, recreational facilities, city and regional level infrastructure, townships. (ii) The conditions at (A) to (C) above, will not apply to Hotels & Touri .....

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inimum floor area requirement has been fulfilled. (v) 'Floor area' will be defined as per the local laws/regulations of the respective State governments/Union territories. (vi) Completion of the project will be determined as per the local bye-laws/ rules and other regulations of State Governments. (vii) Project using at least 40% of the FAR/FSI for dwelling unit of floor area of not more than 140 square meter will be considered as Affordable Housing Project for the purpose of FDI policy .....

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form of plots of developed land or built up space or a combination with common facilities, is developed and made available to all the allottee units for the purposes of industrial activity. (ii) Infrastructure refers to facilities required for functioning of units located in the Industrial Park and includes roads (including approach roads), railway line/sidings including electrified railway lines and connectivities to the main railway line, water supply and sewerage, common effluent treatment fa .....

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ial canteens, convention/conference halls, parking, travel desks, security service, first aid center, ambulance and other safety services, training facilities and such other facilities meant for common use of the units located in the Industrial Park. (iv) Allocable area in the Industrial Park means- (a) in the case of plots of developed land- the net site area available for allocation to the units, excluding the area for common facilities. (b) in the case of built up space- the floor area and bu .....

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ontent; other computer related activities; basic and applied R&D on bio-technology, pharmaceutical sciences/life sciences, natural sciences and engineering; business and management consultancy activities; and architectural, engineering and other technical activities. 12.2 FDI in Industrial Parks would not be subject to the conditionalities applicable for construction development projects etc. spelt out in para 11 above, provided the Industrial Parks meet with the under-mentioned conditions: .....

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elecom Infrastructure Providers Category-l) 48 All telecom services including Telecom Infrastructure Providers Category-I, viz. Basic, Cellular, United Access Services, Unified license (Access services), Unified License, National/ International Long Distance, Commercial V- Sat, Public Mobile Radio Trunked Services (PMRTS), Global Mobile Personal Communications Services (GMPCS), All types of ISP licenses, Voice Mail/Audiotex /UMS, Resale of IPLC, Mobile Number Portability services, Infrastructure .....

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on the automatic route. 16 TRADING 16.1 (i) Cash & Carry Wholesale Trading/Wholesale Trading (including sourcing from MSEs) 100% Automatic 16.1.1 Definition: Cash & Carry Wholesale trading/Wholesale trading, would mean sale of goods/merchandise to retailers, industrial, commercial, institutional or other professional business users or to other wholesalers and related subordinated service providers. Wholesale trading would, accordingly, be sales for the purpose of trade, business and pro .....

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nses/registration/permits, as specified under the relevant Acts/Regulations/Rules/Orders of the State Government/Government Body / Government Authority/Local Self-Government Body under thatState Government should be obtained. (b) Except in case of sales to Government, sales made by the wholesaler would be considered as cash & carry wholesale trading/wholesale trading with valid business customers, only when WT are made to the following entities: (I) Entities holding sales tax / VAT registrat .....

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holding permits/license etc. for undertaking retail trade (like tehbazari and similar license for hawkers) from Government Authorities / Local Self Government Bodies; or (IV) Institutions having certificate of incorporation or registration as a society or registration as public trust for their self consumption. Note: An Entity, to whom WT is made, may fulfill any one of the 4 conditions. (c) Full records indicating all the details of such sales like name of entity, kind of entity, registration/ .....

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r directly. 16.2 E-commerce activities 100% Automatic E-commerce activities refer to the activity of buying and selling by a company through the e-commerce platform. Such companies would engage only in Business to Business (B2B) e-commerce and not in retail trading, inter-alia implying that existing restrictions on FDI in domestic trading would be applicable to e-commerce as well. 50 16.4 Single Brand product retail trading 100% Automatic up to 49%. Government route beyond 49% (1) Foreign Invest .....

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roducts should be sold under the same brand internationally i.e. products should be sold under the same brand in one or more countries other than India. (c) Single Brand product-retail trading would cover only products which are branded during manufacturing. (d) A non-resident entity or entities, whether owner of the brand or otherwise, shall be permitted to undertake single brand product retail trading in the country, for the specific brand, directly or through a legally tenable agreement, with .....

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atic route and SIA/FIPB for cases involving approval. (e) In respect of proposals involving FDI beyond 51%, sourcing of 30% of the value of goods purchased, will be done from India, preferably from MSMEs, village and cottage industries, artisans and craftsmen in all sectors. The quantum of domestic sourcing will be self-certified by the company, to be subsequently checked, by statutory auditors from the duly certified accounts which the company will be required to maintain. This procurement requ .....

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n any form, by means of e-commerce, would not be permissible for companies with FDI, engaged in the activity of single brand retail trading. (3) Applications seeking permission of the Government for FDI exceeding 49% in a company which proposes to undertake single brand retail trading in India would be made to the Secretariat for Industrial Assistance (SIA) in the Department of Industrial Policy & Promotion. The applications would specifically indicate the product/ product categories which a .....

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sidered by the FIPB for Government approval. 16.5 Multi Brand Retail Trading 51% Government FDI in multi brand retail trading, in all products, will be permitted, subject to the following conditions: (i) Fresh agricultural produce, including fruits, vegetables, flowers, grains, pulses, fresh poultry, fishery and meat products, may be unbranded. (ii) Minimum amount to be brought in, as FDI, by the foreign investor, would be US $ 100 million. (iii) At least 50% of total FDI brought in the first tr .....

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rentals, if any, will not be counted for purposes of back-end infrastructure. Subsequent investment in the back-end infrastructure would be made by the MBRT retailer as needed, depending upon its business requirements. (iv) At least 30% of the value of procurement of manufactured/ processed products purchased shall be sourced from Indian micro, small and medium industries, which have a total investment in plant & machinery not exceeding US $2.00 million. This valuation refers to the value at .....

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ement would have to be met, in the first instance, as an average of five years total value of the manufactured/processed products purchased, beginning 1st April of the year during which the first tranche of FDI is received. Thereafter, it would have to be met on an annual basis. (v) Self-certification by the company, to ensure compliance of the conditions at serial nos. (ii), (iii) and (iv) above, which could be cross-checked, as and when required. Accordingly, the investors shall maintain accou .....

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such as transport connectivity and parking. (vii) Government will have the first right to procurement of agricultural products. (viii) The above policy is an enabling policy only and the State Governments/ Union Territories would be free to take their own decisions in regard to implementation of the policy. Therefore, retail sales outlets may be set up in those States/Union Territories which have agreed, or agree in future, to allow FDI in MBRT under this policy. The States / Union Territories w .....

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omotion and additions would be made accordingly. The establishment of the retail sales outlets will be in compliance of applicable State/Union Territory laws/ regulations, such as the Shops and Establishments Act etc. (ix) Retail trading, in any form, by means of e-commerce, would not be permissible, for companies with FDI, engaged in the activity of multi brand retail trading. (x) Applications would be processed in the Department of Industrial Policy & Promotion, to determine whether the pr .....

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rity Interest Act, 2002 (SARFAESI Act). 100% of paid-up capital of ARC (FDI + FII/FPI)54 Automatic up to 49% Government route beyond 49% F.1.1.2 Other conditions: (i) Persons resident outside India can invest in the capital of Asset Reconstruction Companies (ARCs) registered with Reserve Bank, up to 49% on the automatic route, and beyond 49% on the Government route.55 (ii) No sponsor may hold more than 50% of the shareholding in an ARC either by way of FDI or by routing it through an FII/FPI con .....

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ments would be subject to provisions of section 3(3) (f) of Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002. F.2 Banking -Private sector F.2.1 Banking -Private sector 74% including investment by FIIs/RPFIs Automatic upto 49% Government route beyond 49% and upto 74% F.2.2 Other conditions: (1) This 74% limit will include investment under the Portfolio Investment Scheme (PIS) by FIIs/FPIs, NRIs and shares acquired prior to September 16, 2003 by .....

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investments in existing private sector banks also. (4) The permissible limits under portfolio investment schemes through stock exchanges for FIIs/FPIs and NRIs will be as follows: (i) In the case of FIIs/FPIs, as hitherto, individual FII/FPI holding is restricted to below 10 per cent of the total paid-up capital, aggregate limit for all FIIs/FPIs/QFIs cannot exceed 24 per cent of the total paid-up capital, which can be raised to 49 per cent of the total paid-up capital by the bank concerned thr .....

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ion basis. However, NRI holding can be allowed up to 24 per cent of the total paid-up capital both on repatriation and non-repatriation basis provided the banking company passes a special resolution to that effect in the General Body. (c) Applications for foreign direct investment in private banks having joint venture/subsidiary in insurance sector may be addressed to the Reserve Bank of India (RBI) for consideration in consultation with the Insurance Regulatory and Development Authority of Indi .....

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to acquisition by purchase or otherwise of shares of a private bank, if such acquisition results in any person owning or controlling 5 per cent or more of the paid up capital of the private bank will apply to non-resident investors as well. (ii) Setting up of a subsidiary by foreign banks (a) Foreign banks will be permitted to either have branches or subsidiaries but not both. (b) Foreign banks regulated by banking supervisory authority in the home country and meeting Reserve Bank s licensing cr .....

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through a fresh banking license. A foreign bank will be permitted to establish a subsidiary through acquisition of shares of an existing private sector bank provided at least 26 per cent of the paid capital of the private sector bank is held by residents at all times consistent with para (i) (b) above. (e) A subsidiary of a foreign bank will be subject to the licensing requirements and conditions broadly consistent with those for new private sector banks. (f) Guidelines for setting up a wholly- .....

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vals. F.3 Banking- Public Sector F.3.1 Banking- Public Sector subject to Banking Companies (Acquisition & Transfer of Undertakings) Acts 1970/80. This ceiling (20%) is also applicable to the State Bank of India and its associate Banks. 20% (FDI and Portfolio Investment) Government F.4 Commodity Exchanges F.4.1 1. Futures trading in commodities are regulated under the Forward Contracts (Regulation) Act, 1952. Commodity Exchanges, like Stock Exchanges, are infrastructure companies in the commo .....

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ociation to which recognition for the time being has been granted by the Central Government under Section 6 of the Forward Contracts (Regulation) Act, 1952 (iii) Association means any body of individuals, whether incorporated or not, constituted for the purposes of regulating and controlling the business of the sale or purchase of any goods and commodity derivative. (iv) Forward contract means a contract for the delivery of goods and which is not a ready delivery contract. (v) Commodity derivati .....

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er Portfolio Investment Scheme (PIS) will be limited to 23% and Investment under FDI Scheme limited to 26% ]57 58Automatic F.4.3 Other conditions: (i) FII/RFPI purchases shall be restricted to secondary market only and (ii) No non-resident investor / entity, including persons acting in concert, will hold more than 5% of the equity in these companies. (iii) Foreign investment in commodity exchanges will be subject to the guidelines of the Central Government / Forward Markets Commission (FMC). F.5 .....

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overall limit of 74% for foreign investment. (4) Such FII/FPI investment would be permitted subject to the conditions that: (a) A single entity should directly or indirectly hold below 10% equity. (b) Any acquisition in excess of 1% will have to be reported to RBI as a mandatory requirement; and (c) FIIs/RPFIs investing in CICs shall not seek a representation on the Board of Directors based upon their shareholding. F.6 Infrastructure Company in the Securities Market F.6.1 Infrastructure compani .....

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ntermediaries appointed under the provisions of Insurance Regulatory and Development Authority Act, 1999 (41 of 1999) 49% {(FDI+FPI(FII,QFI)+NRI+FVCI+DR} Automatic upto 26% Government route beyond 26% and up to 49% F.7.2 Other Conditions: a) No Indian insurance company shall allow the aggregate holdings by way of total foreign investment in its equity shares by foreign investors, including portfolio investors, to exceed forty-nine percent of the paid up equity capital of such Indian insurance co .....

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an insurance company shall ensure that its ownership and control remains at all times in the hands of resident Indian entities referred to in Notification No. G.S.R 115 (E), dated 19th February, 2015. e) Foreign portfolio investment in an Indian insurance company shall be governed by the provisions contained in sub-regulations (2), (2A), (3) and (8) of regulation 5 of Foreign Exchange Management (Transfer or issue of security by a person resident outside India) Regulations, 2000 and provisions o .....

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urance Regulatory and Development Authority Act, 1999 (41 of 1999): h) Provided that where an entity like a bank, whose primary business is outside the insurance area, is allowed by the Insurance Regulatory and Development Authority of India to function as an insurance intermediary, the foreign equity investment caps applicable in that sector shall continue to apply, subject to the condition that the revenues of such entities from their primary (i.e. non- insurance related) business must remain .....

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nsurance Company', 'Indian Ownership', 'Non-resident Entity', 'Public Financial Institution', 'Resident Indian Citizen', 'Total Foreign Investment' will have the same meaning as provided in Notification No. G.S.R 115 (E), dated 19th February, 2015. F.8 Non-Banking Finance Companies (NBFC) F.8.1 Foreign investment in NBFC is allowed under the automatic route in only the following activities: 100% Automatic (i) Merchant Banking (ii) Under Writing (iii) P .....

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5 million for foreign capital up to 51% to be brought upfront (ii) US $ 5 million for foreign capital more than 51% and up to 75% to be brought upfront (iii)US $ 50 million for foreign capital more than 75% out of which US$ 7.5 million to be brought upfront and the balance in 24 months. (iv) NBFCs (i) having foreign investment more than 75% and up to 100%, and (ii) with a minimum capitalisation of US$ 50 million, can set up step down subsidiaries for specific NBFC activities, without any restric .....

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e minimum capitalisation norm mentioned in (i), (ii) and (iii) above and (vi) below. (vi) Non- Fund based activities : US$ 0.5 million to be brought upfront for all permitted non-fund based NBFCs irrespective of the level of foreign investment subject to the following condition: It would not be permissible for such a company to set up any subsidiary for any other activity, nor it can participate in any equity of an NBFC holding/operating company. Note: The following activities would be classifie .....

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and not operating leases. (2) The NBFC will have to comply with the guidelines of the relevant regulator/s, as applicable F.9 Power Exchanges F.9.1 Power Exchanges under the Central Electricity Regulatory Commission (Power Market) Regulations, 2010 49% (FDI + FII/RFPI) Automatic63 F.9.2 Other conditions: (i) Such foreign investment would be subject to an FDI limit of 26 per cent and an FII/RFPI limit of 23 per cent of the paid-up capital; (ii) FII/RFPI purchases shall be restricted to secondary .....

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of the Foreign Investment Promotion Board. II. The prospective investor and the prospective investee are required to provide a certificate along with the FIPB application. III. Government may incorporate appropriate conditions for FDI in brownfield cases, at the time of granting approval. Note : i. FDI upto 100% under the automatic route is permitted for manufacturing of medical devices. The abovementioned conditions, will, therefore, not be applicable to greenfield as well as brownfield project .....

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; (ac) investigation, replacement or modification or support of the anatomy or of a physiological process; (ad) supporting or sustaining life; (ae) disinfection of medical devices; (af) control of conception; and which does not achieve its primary intended action in or on the human body or animals by any pharmacological or immunological or metabolic means, but which may be assisted in its intended function by such means; b) an accessory to such an instrument, apparatus, appliance, material or ot .....

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I, Section I, para 7 (c ) (iii) (A) All Activities/ Sectors would require prior approval of the Government of India for FDI in accordance with the FDI policy issued by Government of India from time to time. (B) Sectors prohibited for FDI (a) (a) Lottery Business including Government/ private lottery, online lotteries, etc.65 (b) Gambling and Betting including casinos etc. (c) Chit funds (d) Nidhi company (e) Trading in Transferable Development Rights (TDRs) (f) Real Estate Business or Constructi .....

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ities. Annex - 3 (PART I, Section I, para 8(b)) Terms and conditions for Transfer of Shares /Convertible Debentures, by way of Sale, from a Person Resident in India to a Person Resident Outside India and from a Person Resident Outside India to a Person Resident in India 1.1 In order to address the concerns relating to pricing, documentation, payment/ receipt and remittance in respect of the shares/ convertible debentures of an Indian company, in all sectors, transferred by way of sale, the parti .....

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that the relevant regulations under FEMA are complied with and consequent on transfer of shares, the relevant individual limit/sectoral caps/foreign equity participation ceilings as fixed by Government are not breached. Settlement of transactions will be subject to payment of applicable taxes, if any. 3. Method of payment and remittance/credit of sale proceeds 3.1 The sale consideration in respect of the shares purchased by a person resident outside India shall be remitted to India through norma .....

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redited to its special Non-Resident Rupee Account. In case of NRI, if the shares sold were held on repatriation basis, the sale proceeds (net of taxes) may be credited to his NRE /FCNR(B) accounts and if the shares sold were held on non repatriation basis, the sale proceeds may be credited to his NRO account subject to payment of taxes. 3.3 The sale proceeds of shares (net of taxes) sold by an OCB may be remitted outside India directly if the shares were held on repatriation basis and if the sha .....

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r or their duly appointed agent indicating the details of transfer i.e. number of shares to be transferred, the name of the investee company whose shares are being transferred and the price at which shares are being transferred. In case there is no formal Sale Agreement, letters exchanged to this effect may be kept on record. ii. Where Consent Letter has been signed by their duly appointed agent, the Power of Attorney Document executed by the seller/buyer authorizing the agent to purchase/sell s .....

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m a Chartered Accountant. v. Copy of Broker s note if sale is made on Stock Exchange vi. Undertaking from the buyer to the effect that he is eligible to acquire shares/ convertible debentures under FDI policy and the existing sectoral limits and Pricing Guidelines have been complied with. vii. Undertaking from the FII/RFPI to the effect that the individual FII/RFPI ceiling as prescribed by SEBI has not been breached. 4.2 For sale of shares by a person resident outside India i. Consent Letter dul .....

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s effect may be kept on record. iii. If the sellers are NRIs/OCBs, the copies of RBI approvals evidencing the shares held by them on repatriation/non-repatriation basis. The sale proceeds shall be credited to NRE/NRO account, as applicable. iv. Certificate indicating fair value of shares from a Chartered Accountant. v. No Objection/Tax Clearance Certificate from Income Tax authority/Chartered Accountant. vi. Undertaking from the buyer to the effect that the Pricing Guidelines have been adhered t .....

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ift i. Name and address of the transferor (donor) and the transferee (donee). ii. Relationship between the transferor and the transferee. iii. Reasons for making the gift. iv. In case of Government dated securities and treasury bills and bonds, a certificate issued by a Chartered Accountant on the market value of such security. v. In case of units of domestic mutual funds and units of Money Market Mutual Funds, a certificate from the issuer on the Net Asset Value of such security. vi. In case of .....

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sident to the non-resident shall not breach the applicable sectoral cap/ FDI limit in the company and that the proposed number of shares/convertible debentures to be held by the non-resident transferee shall not exceed 5 per cent of the paid up capital of the company.67 viii. An undertaking from the resident transferor that the value of security to be transferred together with any security already transferred by the transferor, as gift, to any person residing outside India does not exceed the ru .....

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son). 4. Son's wife. 5. Daughter (including step-daughter). 6. Father's father. 7. Father's mother. 8. Mother's mother. 9. Mother's father. 10. Son's son. 11. Son's son's wife. 12. Son's daughter. 13. Son's daughter's husband. 14. Daughter's husband. 15. Daughter's son. 16. Daughter's son's wife. 17. Daughter's daughter. 18. Daughter's daughter's husband. 19. Brother (including step-brother). 20. Brother's wife. 21. Sist .....

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the amount of consideration, as specified in para 9 (I) (A) of Schedule I to Notification No. FEMA 20/2000-RB dated May 3, 2000). Permanent Account Number (PAN) of the investee company given by the IT Department No. Particulars (In Block Letters) 1. Name of the Indian company Address of the Registered Office Fax Telephone e-mail 2 Details of the foreign investor/ collaborator Name Address Country 3. Date of receipt of funds 4. Amount In foreign currency In Indian Rupees 5. Whether investment is .....

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mber for the remittance received: Annex - 7 [PART I, Section V, para 1 (i) ] Know Your Customer (KYC) Form in respect of the non-resident investor Registered Name of the Remitter/Investor (Name, if the investor is an Individual) Registration Number (Unique Identification Number*in case remitter is an Individual) Registered Address (Permanent Address if remitter Individual) Name of the Remitter s Bank Remitter s Bank Account No. Period of banking relationship with the remitter * Passport No., Soc .....

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gional Office of the RBI under whose jurisdiction the Registered Office of the company making the declaration is situated as and when shares/convertible debentures are issued to the foreign investor, along with the documents mentioned in item No. 4 of the undertaking enclosed to this Form) Permanent Account Number (PAN) of the investee company given by the Income Tax Department Date of issue of shares/convertible debentures No. Particulars (In Block Letters) 1. Name of the Investee Company Addre .....

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n of the project and NIC code for the district where the project is located a) Detailed address including Name, City, District and State b) Code for District69 c) Code for State Percentage of FDI allowed as per FDI policy (Sectoral Cap under FDI Policy) State whether FDI is allowed under Automatic Route or Approval Route (strike out whichever is not applicable) If under Approval Route, give SIA/FIPB approval No. with date Automatic Route/Approval Route 3. Details of the foreign investor/collabor .....

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hares / Convertible Debentures/Others Issued (a) Nature and date of issue Nature of issue Date of Issue Number of shares/ convertible debentures/Others 01 IPO/FPO 02 Preferential allotment/private placement 03 Rights 04 Bonus 05 Conversion of ECB 06 Conversion of royalty (including lump sum payments) 07 Conversion against import of capital goods by units in SEZ 08 ESOPs 09 Share Swap 10 Others (please specify) Total (b) Type of security issued No Nature of Security Number Maturity Face value Pre .....

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p of premium Amount Control Premium Non competition fee Others@ Total (d) Total inflow (in Rupees) on account of issue of shares/convertible debentures to non-residents (including premium, if any) vide (i) Remittance through AD: (ii) Debit to NRE/FCNR A/c with Bank_________ (iii) Others (please specify) Date of reporting of (i) and (ii) above to RBI under Para 9 (1) A of Schedule I to Notification No. FEMA 20 /2000-RB dated May 3, 2000, as amended from time to time. (e) Disclosure of fair value .....

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quity Funds 07 Pension/Provident Funds 08 Sovereign Wealth Funds 09 Partnership/ Proprietorship Firms 10 Financial Institutions 11 NRIs/PIO 12 Others (please specify) Sub Total b) Resident Total DECLARATION TO BE FILED BY THE AUTHORISED REPRESENTATIVE OF THE INDIAN COMPANY: (Delete whichever is not applicable and authenticate) We hereby declare that: 1. We comply with the procedure for issue of shares / convertible debentures as laid down under the FDI scheme as indicated in Notification No. FEM .....

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issued are bonus. OR c) Shares have been issued under a scheme of merger and amalgamation of two or more Indian companies or reconstruction by way of de-merger or otherwise of an Indian company, duly approved by a court in India. OR d) Shares are issued under ESOP and the conditions regarding this issue have been satisfied 3. Shares have been issued in terms of SIA/FIPB approval No.___________________ dated ____________________ 4 The foreign investment received and reported now will be utilized .....

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ave been complied with; (b) terms and conditions of the Government approval, if any, have been complied with; (c) the company is eligible to issue shares under these Regulations; and (d) the company has all original certificates issued by authorised dealers in India evidencing receipt of amount of consideration in accordance with paragraph 8 of Schedule 1 to Notification No. FEMA 20/2000-RB dated May 3, 2000. (ii) A certificate from SEBI registered Merchant Banker/Chartered Accountant indicating .....

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ace: Date: (* To be signed by Managing Director/Director/Secretary of the Company) CERTIFICATE TO BE FILED BY THE COMPANY SECRETARY OF THE INDIAN COMPANY ACCEPTING THE INVESTMENT: (As per Para 9 (1) (B) (i) of Schedule 1 to Notification No. FEMA 20/2000-RB dated May 3, 2000) In respect of the abovementioned details, we certify the following: 1. All the requirements of the Companies Act, 2013 have been complied with. 2. Terms and conditions of the Government approval, if any, have been complied w .....

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ed to the Company at the time of reporting receipt of remittance R Annex - 9- I [PART I, Section V, para 2] Form FC-TRS Declaration regarding transfer of shares/compulsorily and mandatorily convertible preference shares (CMCPS)/debentures/others by way of sale from resident to non resident/non-resident to resident (to be submitted to the designated AD branch in quadruplicate within 60 days from the date of receipt of funds) The following documents are enclosed For sale of shares/compulsorily and .....

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laration from the buyer to the effect that he is eligible to acquire shares/compulsorily and mandatorily convertible preference shares/debentures/others under FDI policy and the existing sectoral limits and Pricing Guidelines have been complied with. vi. Declaration from the FII/sub account to the effect that the individual FII/Sub account ceiling as prescribed has not been breached. Additional documents in respect of sale of shares/compulsorily and mandatorily convertible preference shares/debe .....

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cable) Transfer from resident to non resident/Transfer from non resident to resident 4. Name of the buyer Constitution/Nature of the investing Entity Specify whether 1. Individual 2. Company 3. FII 4. FVCI# 5. Foreign Trust 6. Private Equity Fund 7. Pension/ Provident Fund 8. Sovereign Wealth Fund (SWFπ) 9. Partnership/Proprietorship firm 10. Financial Institution 11. NRIs / PIOs 12. Others Date and Place of Incorporation 5. Name of the seller Constitution/Nature of the disinvesting entity Sp .....

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es/others (such as FDI compliant instruments like participating interest/rights in oil fields, etc.) to be transferred Date of the transaction Number of shares CMCPS/debentures/others Face Value in Rs. Negotiated Price for the transfer**in Rs. Amount of the consideration in Rs. 8. Foreign Investments in the company Before the transfer After the transfer No. of shares Percentage 9. Where the shares/CMCPS/ debentures/others are listed on Stock Exchange Name of the Stock exchange Price Quoted on th .....

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ERA/FEMA Regulations on repatriation/non repatriation basis. iii. I/ We, am/are eligible to acquire the shares compulsorily and mandatorily convertible preference shares / debentures/others of the company in terms of the FDI Policy. iv. The Sectoral limit under the FDI Policy and the pricing guidelines have been adhered to. Signature of the Declarant or his duly authorised agent Date: Note: In respect of the transfer of shares/compulsorily and mandatorily convertible preference shares/compulsori .....

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ment for the transaction are in accordance with FEMA Regulations / Reserve Bank guidelines. Signature Name and Designation of the Officer Date: Name of the AD Branch AD Branch Code Annex 9-II [PART I, Section V, para 2 ] Know Your Customer (KYC) Form in respect of the non-resident investor Registered Name of the Remitte/Investor (Name, if the investor is an Individual) Registration Number (Unique Identification Number* in case remitter is an Individual Registered Address (Permanent Address if re .....

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p Annex - 10 [PART I, Section V, para 5 ] Form DRR [Refer to paragraph III of Schedule 10] Return to be filed by the Domestic Custodian who has arranged issue/transfer of Depository Receipts Instructions: The Form should be completed and submitted by the Domestic Custodian to the Reserve Bank of India, Foreign Exchange Department, Foreign Investment Division, Central Office, Mumbai. 1. Name of the Domestic Custodian: 2. Address of the Domestic Custodian: 3. Details of the Security: 4. Details of .....

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r foreign investment is applicable. If yes, please give details. 12. If the issue of DR increases the equity capital of the company or is sponsored by the company: Details of the Equity Capital Before Issue After Issue (a) Authorised Capital (b) Issued and Paid-up Capital (i) Held by persons Resident in India (ii) Held by foreign investors other than FIIs/NRIs/PIOs/ OCBs (a list of foreign investors holding more than 10 percent of the paid-up capital and number of shares held by each of them sho .....

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trading platform. Name of Stock Exchange Date of commencement of trading 17 The date on which DRs issue was launched Certified that all the conditions laid down by Government of India and Reserve Bank of India have been complied with. Sd/- Chartered Accountant Sd/- Authorised Signatory of the Company Annex 11 [PART I, Section I, para 16] Form FOREIGN DIRECT INVESTMENT- LLP (I) Report by the Limited Liability Partnerships (LLPs) receiving amount of consideration for capital contribution and acqui .....

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ity Partnership Address of the Registered Office State Fax Telephone e-mail Identification No.(LLPIN) issued by Office of Registrar for LLP. Date of Registration Whether existing LLP or new LLP Existing LLP/New LLP (strike off whichever is not applicable) If existing LLP, give registration number allotted by RBI for FDI, if any 2. Details of the foreign investor Name Designated Partner Identification No. (DPIN): Address Country Constitution/Nature of the investing Entity [Specify whether 1. Indi .....

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elated conditions. Yes/No iii) Details of Government Approval (ref. no. of approval letter and date). [Copy enclosed] 6. Name of the AD bank through whom the remittance is received. 7. Address of the AD bank (Authorised signatory of the investee LLP) (Stamp) (Authorised signatory of the AD bank) (Stamp) FOR USE OF THE RESERVE BANK ONLY: Unique Identification Number for the remittance received: DECLARATION TO BE FILED BY THE AUTHORISED REPRESENTATIVE OF THE LIMITED LIABILITY PARTNERSHIP: (Delete .....

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RB dated 3rd May 2000: (i) A certificate from our designated partner certifying that (a) all the requirements of the LLP Act, 2008 have been complied with; (b) terms and conditions of the Government approval, have been complied with; (c) the LLP is eligible to issue capital contribution /profit shares under these Regulations; and (d) the LLP has all original certificates issued by authorised dealers in India evidencing receipt of amount of consideration in accordance with Notification No. FEMA 2 .....

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ct, 1967 (UAPA). We confirm that the investment complies with the provisions of all applicable Rules and Regulations. 5. Unique Identification Numbers given for all the remittances received so far as consideration for capital contribution and acquisition of profit shares (details as above), by Reserve Bank. R R (Signature of the Applicant)* :___________________________________________ (Name in Block Letters) :___________________________________________ (Designation of the signatory) :___________ .....

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3. The LLP is eligible to issue capital contribution/profit shares under these Regulations. 4. The LLP has all original certificates issued by AD Category - I banks in India, evidencing receipt of amount of consideration in accordance with provisions of Notification No. FEMA 20/2000-RB dated May 3, 2000. (Name & Signature of the Designated Partner/Authorised Signatory of the LLP) (Seal) FOR USE OF THE RESERVE BANK ONLY: Registration Number for the FOREIGN DIRECT INVESTMENT-LLP: R Unique Iden .....

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For transfer of capital contribution /profit shares of a Limited Liability Partnership by a person resident in India i. Consent Letter duly signed by the seller and buyer or their duly appointed agent and in the latter case the Power of Attorney Document. ii. The capital contribution/ profit share holding pattern of the investee LLP after the acquisition of capital contribution/profit shares by a person resident outside India. iii. Certificate indicating fair value of shares from the Chartered A .....

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/profit shares of an Limited Liability Partnership by a person resident outside India. v. No Objection/Tax Clearance Certificate from Income Tax Authority/ Chartered Account//Cost Accountant/ Company Secretary in practice. 1. Name of the Limited Liability Partnership Address (including e-mail, telephone Number, Fax no) Activity Identification No.(LLPIN) NIC Code No.71 2. Nature of transaction Transfer from resident to non resident/Transfer from non resident to resident 3. Name of the buyer Const .....

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ign Trust 5. Private Equity Fund 6. Pension/Provident Fund 7. Sovereign Wealth Fund (SWF∏) 8. Partnership/Proprietorship firm 9. Financial Institution 10. NRIs/PIOs 11. others Date and Place of Incorporation Address of the seller (including e-mail, telephone Number Fax no) 6. Particulars of earlier FIPB approvals. 7. Details regarding capital contribution or profit shares of a Limited Liability Partnership to be transferred. Date of the transaction Percentage of capital contribution/profit .....

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that : i. The particulars given above are true and correct to the best of my/our knowledge and belief. ii. I/ We, was/were holding the capital contribution/profit shares of a Limited Liability Partnership as per foreign investment policy issued by the Government of India as well as notified under FEMA Regulations. iii. I/ We, am/are eligible to acquire the capital contribution /profit shares of a Limited Liability Partnership in terms of the foreign investment policy issued by the Government of .....

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ed Liability Partnership from non-resident to resident the declaration has to be signed by the non-resident seller. Certificate by the AD Bank Branch It is certified that the application is complete in all respects. The receipt /payment for the transaction are in accordance with FEMA Regulations / Reserve Bank guidelines. Signature Name and Designation of the Officer Date: Name of the AD Bank Branch AD Bank Branch Code Annex - 13 Appendix List of Important Circulars/Notifications which have been .....

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January 17, 2003 10. No. FEMA 94/2003-RB June 18, 2003 11. No. FEMA 100/2003-RB October 3, 2003 12. No. FEMA 101/2003-RB October 3, 2003 13. No. FEMA 106/2003-RB October 27, 2003 14. No. FEMA 108/2003-RB January 1, 2004 15. No. FEMA 111/2004-RB March 6 , 2004 16. No.FEMA.118/2004-RB June 29, 2004 17. No.FEMA.122/2004-RB August 30, 2004 18. No.FEMA.125./2004-RB November 27, 2004 19. No.FEMA.130/2005-RB March 17, 2005 20. No.FEMA.131/2005-RB March 17, 2005 21. No.FEMA.138/2005-RB July 22, 2005 22 .....

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-RB May 29, 2012 35. No. FEMA.242/2012-RB October 19, 2012 36. No. FEMA.255/2013-RB January 19, 2013 37. No. FEMA.266/2013-RB March 05, 2013 38. No. FEMA.272/2013-RB March 26, 2013 39. No. FEMA.278/2013-RB June 07,2013 40. No. FEMA.279/2013-RB July 10, 2013 41. No. FEMA.285/2013-RB August 30, 2013 42. No. FEMA.291/2013-RB October 4, 2013 43. No. FEMA.294/2013-RB November 12, 2013 44. No. FEMA.296/2013-RB March 3, 2014 45. No. FEMA.297/2013-RB March 13, 2014 46. No.FEMA.298/2013-RB March 13, 2014 .....

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A.P.DIR(Series) Circular No.32 April 28, 2001 5. A.P.DIR(Series) Circular No.13 November 29, 2001 6. A.P.DIR(Series) Circular No.21 February 13, 2002 7. A.P.DIR(Series) Circular No.29 March 11, 2002 8. A.P.DIR(Series) Circular No.45 November 12, 2002 9. A.P.DIR(Series) Circular No.52 November 23, 2002 10. A.P.DIR(Series) Circular No.68 January 13, 2003 11. A.P.DIR(Series) Circular No.69 January 13, 2003 12. A.P.DIR(Series) Circular No.75 February 3, 2003 13. A.P.DIR(Series) Circular No.88 March .....

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ular No.44 December 8, 2003 24. AP (DIR Series) Circular No.53 December 17, 2003 25. A.P.DIR(Series) Circular No.54 December 20, 2003 26. A.P.DIR(Series) Circular No.63 February 3, 2004 27. A.P.DIR(Series) Circular No.67 February 6, 2004 28. A.P.DIR(Series) Circular No.89 April 24, 2004 29. A.P.DIR(Series) Circular No.11 September 13, 2004 30. A.P.DIR(Series) Circular No.13 October 1, 2004 31. A.P.DIR(Series) Circular No.15 October 1, 2004 32. A.P.DIR(Series) Circular No.16 October 4, 2004 33. A .....

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ircular No. 12 November 16, 2006 43. A.P.(DIR Series) Circular No. 25 December 22, 2006 44. A.P.(DIR Series) Circular No. 32 February 8, 2007 45. A.P.(DIR Series) Circular No. 40 April 20, 2007 46. A.P.(DIR Series) Circular No. 62 May 24, 2007 47. A.P.(DIR Series) Circular No. 65 May 31, 2007 48. A.P.(DIR Series) Circular No. 73 June 8, 2007 49. A.P.(DIR Series) Circular No. 74 June 8, 2007 50. A.P(DIR Series) Circular No. 2 July 19, 2007 51. A.P(DIR Series) Circular No. 20 December 14, 2007 52. .....

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o. 49 May 4, 2010 62. A.P.(DIR Series) Circular No. 13 September 14, 2010 63. A.P.(DIR Series) Circular No. 45 March 15, 2011 64. A.P.( DIR Series) Circular No. 54 April 29, 2011 65. A.P.( DIR Series) Circular No. 55 April 29, 2011 66. A.P.( DIR Series) Circular No. 57 May 2, 2011 67. A.P.( DIR Series) Circular No. 58 May 2, 2011 68. A.P.(DIR Series) Circular No.74 June 30, 2011 69. A.P. (DIR Series) Circular No. 8 August 9, 2011 70. A.P. (DIR Series) Circular No. 14 September 15, 2011 71. A. P. .....

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R Series) Circular No. 93 March 19, 2012 81. A.P. (DIR Series) Circular No. 94 March 19, 2012 82. A.P. (DIR Series) Circular No.120 May 8, 2012 83. A.P. (DIR Series) Circular No.121 May 8, 2012 84. A.P. (DIR Series) Circular No. 127 May 15, 2012 85. A.P. (DIR Series) Circular No. 133 June 20, 2012 86. A.P. (DIR Series) Circular No. 135 June 25, 2012 87. A.P. (DIR Series) Circular No. 137 June 28, 2012 88. A.P. (DIR Series) Circular No. 7 July 16, 2012 89. A.P. (DIR Series) Circular No. 16 August .....

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99. A.P. (DIR Series) Circular No. 110 June 12, 2013 100 A.P. (DIR Series) Circular No. 111 June 12, 2013 101. A.P.(DIR Series) Circular No. 1 July 04, 2013 102. A.P.(DIR Series) Circular No. 28 August 19, 2013 103. A.P.(DIR Series) Circular No. 29 August 20, 2013 104. A.P.(DIR Series) Circular No. 37 September 5, 2013 105. A.P.(DIR Series) Circular No. 38 September 6, 2013 106. A.P.(DIR Series) Circular No. 42 September 12, 2013 107. A.P.(DIR Series) Circular No. 44 September 13, 2013 108. A.P. .....

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DIR Series) Circular No.104 February 14, 2014 118. A.P.(DIR Series) Circular No. 107 February 20, 2014 119. A.P.(DIR Series) Circular No. 112 March 25, 2014 120. A.P.(DIR Series) Circular No. 118 April 7, 2014 121. A.P.(DIR Series) Circular No. 123 April 16, 2014 122. A.P. (DIR Series) Circular No. 124 April 21, 2014 123. A.P. (DIR Series) Circular No. 127 May 2, 2014 124. A.P. (DIR Series) Circular No. 140 June 6, 2014 125. A.P. (DIR Series) Circular No. 141 June 6, 2014 126. A.P. (DIR Series) .....

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cular No.71 February 3, 2015 136. A.P. (DIR Series) Circular No.72 February 5, 2015 137. A.P. (DIR Series) Circular No.73 February 6, 2015 138. A.P. (DIR Series) Circular No.94 April 08, 2015 139. A.P. (DIR Series) Circular No.107 June 11, 2015 - 1 "Shares" mentioned in this Master Circular means equity shares, "preference shares" means fully and mandatorily convertible preference shares and "convertible debentures" means fully and mandatorily convertible debentures .....

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in such circumstances as would indicate his intention to stay outside India for an uncertain period; (B) a person who has come to or stays in India, in either case, otherwise than- (a) for or on taking up employment in India, or (b) for carrying on in India a business or vocation in India, or (c) for any other purpose, in such circumstances as would indicate his intention to stay in India for an uncertain period; (ii) any person or body corporate registered or incorporated in India, (iii) an of .....

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337/2015-RB dated, 2015 6 Notification No.FEMA.320/2014-RB dtd Sep 5, 2014 7 Vide A.P.(DIR Series) Circular No. 68 dated November 1, 2013 8 Vide AP.(Dir Series) Circular No 37 dated September 5, 2013 9 Vide AP.(Dir Series) Circular No 72 dated November 11, 2013 10 Vide AP(DIR Series) Circular No 38 dated September 6, 2013 11 Notification No. FEMA. 315/2014-RB dtd July 10, 2014 12 Amended Vide APDIR 141 dated June 6, 2014 13 Amended vide AP (DIR Series) Circular No. 44 dated September 13, 2013 14 .....

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Series) Circular No.140 dated June 6, 2014 22 A.P. (DIR Series) Circular No.22 dated August 28, 2014 23 A.P. (DIR Series) Circular No.140 dated June 6, 2014 24 Vide A.P.(DIR Series) Circular No 74 dated November 11, 2013 25 Vide A.P.(DIR Series) Circular No.71 dated February 3, 2015 26 Vide A. P. (DIR Series) Circular No.73 dated February 6, 2015 27 Vide A.P.(DIR Series) Circular No.99 dated January 29, 2014 28 A. P. (DIR Series) Circular No. 13 dated July 13, 2014 29 Vide A.P.(DIR Series) Circu .....

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person resident outside India who is a citizen of India or is a person of Indian origin; 34 'Person of Indian Origin' means a citizen of any country other than Bangladesh or Pakistan or Sri Lanka, if a) he at any time held Indian passport; or b) he or either of his parents or any of his grand - parents was a citizen of India by virtue of the Constitution of India or the Citizenship Act, 1955 (57 of 1955); or c) the person is a spouse of an Indian citizen or a person referred to in sub-cl .....

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r of Indian partner/public within period of 5 years - deleted w.e.f 22.8.2013 40 PN 6 of 2013 41 Notification No.FEMA. 319 /2014-RB dtd Sep 5, 2014 42 Notification No.FEMA.312/2014-RB dtd July 2, 2014 43 Notification No.FEMA.312/2014-RB dated July 2, 2014 44 Notification No.FEMA.312/2014-RB dtd July 2, 2014 45 PN 6 of 2013 46 PN 10 of 2014 notified vide Notification No. 329 dated December 8, 2014 47 Notification No.FEMA.320/2014-RB dtd Sep 5, 2014 48 Notification No.FEMA.312/2014-RB dtd July 2, .....

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2014 61 PN 6 of 2013 62 Substituted w.e.f. February 4, 2014 vide FEMA Notification 301 dated April 4, 2014 63 PN 6 of 2013 64 Notification No. FEMA. 334/2015-RB dtd Jan 9, 2015 65 Notification No.FEMA.320/2014-RB dtd Sep 5, 2014 66 A. P. (DIR Series) Circular No. 4 dated July 15, 2014 67 AP (DIR Series) Circular No. 08 dated August 25, 2005 68 In terms of AP (DIR Series) Circular No 5 dated July 17, 2014, NIC 2008 codes may be reported 69 The list of State and District Codes may be downloaded fr .....

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