Contact us   Feedback   Annual Subscription   New User   Login      
Tax Management India .com
TMI - Tax Management India. Com
Extracts
Home List
← Previous Next →

Foreign Exchange Management (Transfer or Issue of Security by a Person Resident outside India) (Second Amendment) Regulations 2016

FEMA - 362/2016-RB - Dated:- 15-2-2016 - RESERVE BANK OF INDIA (Foreign Exchange Department) (CENTRAL OFFICE) NOTIFICATION No.FEMA.362/2016-RB Mumbai, the 15th February , 2016 G.S.R. 166 (E) .-In exercise of the powers conferred by clause (b) of sub-section (3) of Section 6 and Section 47 of the Foreign Exchange Management Act, 1999 (42 of 1999), the Reserve Bank of India hereby makes the following amendments in the Foreign Exchange Management (Transfer or issue of Security by a Person Resident .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

se (viiA) and before the existing clause (viia), the following clause shall be inserted, namely: (vii AA) Manufacture , with its grammatical variations, means a change in a non-living physical object or article or thing- (a) resulting in transformation of the object or article or thing into a new and distinct object or article or thing having a different name, character and use; or (b) bringing into existence of a new and distinct object or article or thing with a different chemical composition .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

zens. A Limited Liability Partnership will be considered as owned by resident Indian citizens if more than 50% of the investment in such an LLP is contributed by resident Indian citizens and/ or entities which are ultimately owned and controlled by resident Indian citizens and such resident Indian citizens and entities have majority of the profit share; (b) A company owned by non-residents shall mean an Indian company that is not owned by resident Indian citizens. 1[(ia) Control shall include th .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

use (iv), the existing sub-clause (D) shall be amended, namely: D) In the I&B sector where the sectoral cap is up to 49%, the company would need to be 'owned and controlled' by resident Indian citizens and Indian companies, 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 Institutio .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

longs has management and controlling interest. (ii) In the case of an Indian company, (aa) The Indian company (bb) A group of Indian companies under the same management and ownership control. (b) For the purpose of this Clause, "Indian company" shall be a company which must have a resident Indian or a relative as defined under Section 2 (77) of 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 al .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

stment in sectors/activities under government approval route will be subject to government approval where: (i) An Indian company is being established with foreign investment and is not owned by a resident entity or (ii) An Indian company is being established with foreign investment and is not controlled by a resident entity or (iii) The control of an existing Indian company, currently owned or controlled by resident Indian citizens and Indian companies, which are owned or controlled by resident .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ce of transfer of shares and/or fresh issue of shares to non-resident entities through amalgamation, merger/demerger acquisition etc. 2[(v) It is clarified that Foreign investment shall include all types of foreign investments i.e. FDI, investment by FIIs, FPIs, QFIs, NRIs, ADRs, GDRs, Foreign Currency Convertible Bonds (FCCB) and fully, mandatorily & compulsorily convertible preference shares/debentures, regardless of whether the said investments have been made under Schedule 1, 2, 2A, 3, 6 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

FEMA (Transfer or issue of Security by Persons Resident Outside India) Regulations, 2000 and such investment will also be deemed domestic investment at par with the investment made by residents. (d) in sub-regulation 6, the existing clause (ii) shall be amended, namely: (ii) Downstream investments by Indian companies/LLPs will be subject to the following conditions: 3[a. Such a company/LLP is to notify SIA, DIPP and FIPB of its downstream investment in the form available at http://www.fipb.gov.i .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

the purpose of downstream investment, the Indian companies/LLPs making the downstream investments would have to bring in requisite funds from abroad and not leverage funds from the domestic market. This would, however, not preclude downstream companies/LLPs, with operations, from raising debt in the domestic market. Downstream investments through internal accruals are permissible (For the purposes of FDI, internal accruals will mean as profits transferred to reserve account after payment of taxe .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

lations. B. Those companies, which are Core Investment Companies (CICs), will have to additional follow RBI's Regulatory Framework for CICs. C. For undertaking activities which are under automatic route and without FDI linked performance conditions, Indian company which does not have any operations and also does not have any downstream investments, will be permitted to have infusion of foreign investment under automatic route. However, approval of the Government will be required for such com .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

itionalities and caps; e) The FDI recipient Indian company at the first level which is responsible for ensuring compliance with the FDI conditionalities like no indirect foreign investment in prohibited sector, entry route, sectoral cap / conditionalities, etc. for the downstream investment made by in the subsidiary companies at second level and so on and so forth would obtain a certificate to this effect from its statutory auditor on an annual basis as regards status of compliance with the inst .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

), Regional Office (RO) of the Reserve Bank in whose jurisdiction the Registered Office of the company is located and shall also obtain acknowledgement from the RO of having intimated it of the qualified auditor report. RO shall file the action taken report to the Chief General Manager-in-Charge, Foreign Exchange Department, Reserve Bank of India, Central Office, Central Office Building, Shahid Bhagat Singh Road, Mumbai 400001." C In Schedule 1, (i) In paragraph 2, paragraph beginning with .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

d in the swap arrangement will have to be made by a Merchant Banker registered with SEBI or an Investment Banker outside India registered with the appropriate regulatory authority in the home country. Note: A company engaged in a sector where foreign investment requires Government approval may issue shares to a non-resident through swap of shares only with approval of the Government.] (iii) in paragraph 3, the existing sub-paragraph (c) shall stands deleted. (iv) in Annex B , the existing table .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

nditions; 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 The term under controlled conditions covers the following: (i) Cultivation under controlled conditions' for the categories of floriculture, horticulture, cultivation of vegetables and mushrooms is the practice of cultivation wherein rainfall, temperature, solar radiation, air humidity and culture medium are con .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

dity 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 Practices and Minimum Standard Protocol. (b) Poultry breeding farms and hatcheries where micro-climate is controlled through advanced technologies like incubators, ventilation systems etc. (iii) In the case of pisciculture and aquaculture, scope of the term under cont .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

luding tea plantations ii. Coffee plantations iii. Rubber Plantations iv. Cardamom plantations v. Palm oil tree plantations vi. Olive oil tree plantations Note: FDI is not allowed in any plantation sector/activity except those mentioned above. 100% Automatic route 2.2 Other Condition Prior approval of the State Government concerned is required in case of any future land use change. 3. MINING 3.1 Mining and Exploration of metal and non-metal ores including diamond, gold, silver and precious ores .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ny 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 activities 3.3.1 Mining and mineral separation of titanium bearing minerals & ores, its value addition and integrat .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

rd such as Atomic Energy (Radiation Protection) Rules, 2004 and the Atomic Energy (Safe Disposal of Radioactive Wastes) Rules, 1987. (ii)FDI will not be allowed in mining of "prescribed substances" listed in the Notification No. S.O. 61(E), dated 18.1.2006, issued by the Department of Atomic Energy. Clarification: i. For titanium bearing ores such as Ilmenite, Leucoxene and Rutile, manufacture of titanium dioxide pigment and titanium sponge constitutes value addition, Ilmenite can be p .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ed. 4. Petroleum & Natural Gas 4.1 Exploration activities of oil and natural gas fields, infrastructure related to marketing of petroleum products and natural gas, marketing of natural gas and petroleum products, petroleum product pipelines, natural gas/pipelines, LNG Regasification infrastructure, market study and formulation and Petroleum refining in the private sector, subject to the existing sectoral policy and regulatory framework in the oil marketing sector and the policy of the Govern .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

n India through wholesale and/or retail, including through e-commerce without Government approval. 6. Defence 5[6.1 Defence Industry subject to Industrial license under the Industries (Development & Regulation) Act, 1951 49% Automatic route up to 49% Above 49% under Government route on case to case basis, wherever it is likely to result in access to modern and 'state-of art' technology in the country.] 6.2 Other Conditions i. Infusion of fresh foreign investment within the permitted .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

urity clearance and guidelines of the M/o Defence. iv. Investee company should be structured to be self-sufficient in areas of product design and development. The investee/joint venture company along with manufacturing facility, should also have maintenance and life cycle support facility of the product being manufactured in India. 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 H .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

oute beyond 49% 7.2 Broadcasting Content Services 7.2.1 Terrestrial Broadcasting FM (FM Radio), 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. 49% Government 7.2.2 Up-Linking of News & Current Affairs TV Channels 49% Government 7.2.3 Up-linking a Non-'News & Current Affairs' TV Channels/Down-linking of TV Channels 100% Automatic 7.3 FDI for Up-linking .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

d activities shall include, in addition to FDI, investment by Foreign Institutional Investors (FIIs), Foreign Portfolio Investors(FPIs), Non-Resident Indians (NRIs), Foreign Currency Convertible Bonds (FCCBs), [ Depository Receipts issued under Schedule 10 of these Regulations with equity shares or compulsorily and mandatorily convertible preference shares or compulsory and mandatorily convertible debentures or warrant or any other security in which foreign direct investment can be made in terms .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

Chief Security Officer should be resident Indian citizens Security Clearance of Personnel (iii) The Company, all Directors on the Board of Directors 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 (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 a .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

have to be obtained. It shall be obligatory on the part of the company to also take prior permission from the Ministry of Information and Broadcasting before effecting any change in the Board of Directors. (iv) The Company shall be required to obtain security clearance of all foreign personnel likely to be deployed for more 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 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

enied or withdrawn for any reasons whatsoever, the permission holder/licensee will ensure that the concerned person resigns or his services terminated forthwith after receiving such directives from the Government, failing which the permission/license granted shall be revoked and the company shall be disqualified to hold any such Permission/license in future for a period of five years. Infrastructure/Network/Software related requirement (vii) The officers/officials of the licensee companies deali .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

by relevant Law. (x) The Company must provide traceable identity of their subscribers. Monitoring, Inspection and Submission of Information (xi) The Company should ensure that necessary provision (hardware/software) is available in their equipment for doing the Lawful interception and monitoring from a centralized location 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, .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

mpany will, if required by the Government or its authorized representative, provide necessary facilities for continuous monitoring for any particular aspect of the company's activities and operations. Continuous monitoring, however, will be confined only to security related aspects, including screening of objectionable content. (xiv) The inspection will ordinarily be carried out by the Government of India, Ministry of Information & Broadcasting or its authorized representative after reas .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

estimates, returns or such other relevant information and at such periodic intervals or such times as may be required. The service providers should familiarize/train designated officials of the Government or officials of TRAI or its authorized representative(s) in respect of relevant operations/features of their systems. National Security Conditions (xvii) It shall be open to the licensor to restrict the Licensee Company from operating in any sensitive area from the National Security angle. The .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

not import or utilize any equipment, which are identified as unlawful and/or render network security vulnerable. Other conditions (xix) Licensor reserves the right to modify these conditions or incorporate new conditions considered necessary in the interest of national security and public interest or for proper provision of broadcasting services. (xx) Licensee will ensure that broadcasting service installation carried out by it should not become a safety hazard and is not in contravention of any .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ment would also be subject to the Guidelines for Publication of Indian editions of foreign magazines dealing with news and current affairs issued by the Ministry of Information & Broadcasting on 4-12-2008. 8.3 Publishing/printing of 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 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

lines for publication of newspapers and periodicals dealing with news and current affairs and publication of facsimile edition of foreign newspapers issued by Ministry of Information & Broadcasting on 31-3-2006, as amended from time to time. 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; .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ll buildings, sheds, vessels, piers and other structures thereon or pertaining thereto; (iii) "Air transport service" means a service for the transport by air of persons, mails or any other thing, animate or inanimate, for any kind of remuneration 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) &quo .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

n the same two or more places and operated according to a published time table or with flights so regular or frequent that they constitute a recognizably systematic series, each flight being open to use by members of the public; (viii) "Non-Scheduled air Transport 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 Requ .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

or traffic handling. 9.2 Airports (a) Greenfield projects (b) Existing projects 100% 100% Automatic Automatic upto 74% ; Government Route beyond 74% 9.3 Air Transport Services (a) Scheduled Air Transport Service/Domestic Scheduled Passenger Airline (b) Regional Air Transport Service 49% (100% for NRIs) Automatic (2) Non-Scheduled Air Transport Service 100% Automatic (3) Helicopter services/ seaplane services requiring DGCA approval 100% Automatic 9.3.1 Other Conditions (a) Air Transport Services .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

apital. Such investment would be subject to the following conditions: (i) It would be made under the Government approval route. (ii) The 49% limit will subsume FDI and FII/FPI investment. (iii) The investments so made would need to comply with the relevant 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& .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

deployment; and (vi) All technical equipment that might be imported into India as a result of such investment shall require clearance from the relevant authority in the Ministry of Civil Aviation. Note: (i) The FDI limits/entry routes, mentioned at paragraph 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 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

institutions 100% Automatic 10. Courier services for carrying packages, parcels and other items which do not come within the ambit of the Indian Post Office Act, 1898 and excluding the activity relating to the distribution of letters 100% Automatic 11. Construction Development: Townships, Housing, Built-up infrastructure 11.1 Construction-development projects (which would include development of townships, construction of residential/commercial premises, roads or bridges, hotels, resorts, hospita .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

otwithstanding anything contained at (A) (i) above, a foreign investor will be permitted to exit and repatriate foreign investment before the completion of project under automatic route, provided that a lock-in-period of three years, calculated with reference to each tranche' of foreign investment has been completed. Further, transfer of stake from one non-resident to another non- resident, without repatriation of investment will neither be subject to any lock-in period nor to any government .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

i.e. roads, water supply, street lighting, drainage and sewerage, have been made available. (D) 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/regulations of the State Government/Munic .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

earning profit 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. Further, earning of rent income on lease of the property, not amounting to transfer, will not amount to real estate business. ii. Condition of lock-in period at (A) above will not apply to Hotels &Tourist Resorts, Hospitals, Special Economic Zones (SEZs) .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

s is also permitted. However, there would be a lock-in-period of three years, calculated with reference to each tranche of FDI, and transfer of immovable property or part thereof is not permitted during this period. v. "Transfer", in relation to FDI policy on the sector, includes,- a. the sale, exchange or relinquishment of the asset; or b. the extinguishment of any rights therein; or c. the compulsory acquisition thereof under any law; or d. any transaction involving the allowing of t .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

Park" is a project in which quality infrastructure in the 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 railwa .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ervices, air conditioning, common facility buildings, industrial 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 c .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ltancy and supply; data processing, database activities and distribution of electronic content; 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 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

vernment 14. Private Security Agencies 49% Government 15. Telecom services (including Telecom Infrastructure Providers Category-l) 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 Mai .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

oT) from time to time, except Other Service Providers , which are allowed 100% FDI 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. Wholes .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

Carry Wholesale Trading/Wholesale Trading (WT): (a) For undertaking WT', requisite licenses/registration/permits, as specified under the relevant Acts/Regulations/Rules/Orders of the State Government/Government Body/Government Authority /Local Self-Government Body under that State 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 cust .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

s itself/himself/herself engaged in a business involving commercial activity; or (iii) Entities 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 fulfil anyone of the 4 conditions. (c) Full records .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ions. (f) A wholesale/cash & carry trader can undertake single brand retail trading, subject to the conditions mentioned in para 16.3. An entity undertaking wholesale/cash and carry as well as retail business will be mandated to maintain separate books of accounts for these two arms of the business and duly audited by the statutory auditors. Conditions of the FDI policy for wholesale/cash and carry business and for retail business have to be separately complied with by the respective busines .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

tment in Single Brand product retail trading is aimed at attracting investments in production and marketing, improving the availability of such goods for the consumer, encouraging increased sourcing of goods from India, and enhancing competitiveness of Indian enterprises through access to global designs, technologies and management practices. 2) FDI in Single Brand product retail trading would be subject to the following conditions: a) Products to be sold should be of a 'Single Brand' on .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

y tenable agreement with the brand owner for undertaking single brand product retail trading. The onus for ensuring compliance with this condition will rest with the Indian entity carrying out single-brand product retail trading in India. The investing entity shall provide evidence to this effect at the time of seeking approval, including a copy of the licensing/franchise/sub-licence agreement, specifically indicating compliance with the above condition. The requisite evidence should be filed wi .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

in. This procurement requirement would have to be met annually from the commencement of the business i.e. opening of the first store. For the purpose of ascertaining the sourcing requirement, the relevant entity would be the company, incorporated in India, which is the recipient of Foreign Investment for the purpose of carrying out single-brand product retail trading. f) Subject to the conditions mentioned in this Para, a single brand retail trading entity operating through brick and mortar stor .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

uct/product categories to be sold under 'Single Brand' would require a fresh approval of the Government. In case of FDI up to 49 %, the list of products/product categories proposed to be sold except food products would be provided to the RBI. 4) Applications would be processed in the Department of Industrial Policy & Promotion, to determine whether the proposed investment satisfies the notified guidelines, before being considered by the FIPB for Government approval. Note: i. Conditio .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

dian brands should be owned and controlled by resident Indian citizens and/or companies which are owned and controlled by resident Indian citizens. v. Government may relax sourcing norms for entities undertaking single brand retail trading of products having 'state-of-art' and 'cutting-edge' technology and where local sourcing is not possible.] 16.4 Multi Brand Retail Trading 51% Government (1) FDI in multi brand retail trading, in all products, will be permitted, subject to the .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

all activities, excluding that on front-end units; for instance, back-end infrastructure will include investment made towards processing, manufacturing, distribution, design improvement, quality control, packaging, logistics, storage, warehouse, agriculture market produce infrastructure etc. Expenditure on land cost and 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, d .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ch industry shall continue to qualify as a 'small industry' for this purpose, even if it outgrows the said investment of US $ 2.00 million during the course of its relationship with the said retailer. Sourcing from agricultural co-operatives and farmers co-operatives would also be considered in this category. The procurement requirement would have to be met, in the first instance, as an average of five years total value of the manufactured/processed products purchased, beginning lst Apri .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

r any other cities as per the decision of the respective State Governments, and may also cover an area of 10 kms. Around the municipal/urban agglomeration limits of such cities; retail locations will be restricted to conforming areas as per the Master/Zonal Plans of the concerned cities and provision will be made for requisite facilities such as transport connectivity and parking. (vii) Government will have the first right to procurement of agricultural products. (viii) The above policy is an en .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ed to the Government of India through the Department of Industrial Policy & Promotion and additions would be made to the list at (2) below 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) Applicat .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

aveli (Union Territories) 7[16.5 Duty Free Shops 100% Automatic (i) Duty Free Shops would mean shops set up in custom bonded area at International Airports/ International Seaports and Land Custom Stations where there is transit of international passengers. (ii) Foreign investment in Duty Free Shops is subject to compliance of conditions stipulated under the Customs Act, 1962 and other laws, rules and regulations. (iii) Duty Free Shop entity shall not engage into any retail trading activity in th .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

oute 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. (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 controlled by the single sponsor. (iii) The total shareholding of an individual FII/FPI shall be below 10% of the total paid-up .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ement of Security Interest Act, 2002. F.2 Banking - Private sector F.2.1 Banking - Private sector 74% 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 erstwhile OCBs, and shall continue to include investment made by non-residents under IPOs, Private placements, DRs and through acquisition of shares from exis .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

hrough 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 up to sectoral limit of 74 per cent of the total paid-up capital by the bank concerned through a resolution by its Board of Directors followed by a special resolution to that effect by .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

effect in the General Body. b. 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 India (IRDAI) in order to ensure that the 49 per cent limit of foreign shareholding applicable for the insurance sector is not being breached. c. Transfer of shares under FDI from residents to non-residents will .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ill 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 criteria will be allowed to hold 100 per cent paid-up capital to enable them to set up a wholly-owned subsidiary in India. (c) A foreign bank may operate in India through only one of the three .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

the paid-up 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-owned subsidiary of a foreign bank will be issued separately by RBI. (g) All applications by a foreign bank for setting up a subsidiary or for conversion of their existing branches to subs .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ble to the State Bank of India and its associate banks. 20% 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 commodity futures market. With a view to infuse globally acceptable best practices, modern management skills and latest technology, it was decided to allow foreign investment in Commodity Exchanges. 2. For the purposes o .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

s 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 derivative" means- • a contract for delivery of goods, which is not a ready delivery contract; or • a contract for differences which derives its value fr .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

estment in commodity exchanges will be subject to the guidelines of the Central Government / SEBI from time to time. F.5 Credit Information Companies (CIC) F.5.1 Credit Information Companies 100% Automatic F.5.2 Other Conditions: (1) Foreign investment in Credit Information Companies is subject to the Credit Information Companies (Regulation) Act, 2005. (2) Foreign investment is permitted subject to regulatory clearance from RBI. (3) Such FII/FPI investment would be permitted subject to the cond .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

SEBI Regulations 49% Automatic F.6.2 Other Conditions: F.6.2.1 FII/FPI can invest only through purchases in the secondary market F.7. Insurance F.7.1 Insurance (i) Insurance Company (ii) Insurance Brokers (iii) Third Party Administrators (iv) Surveyors and Loss Assessors (v) Other Insurance Intermediaries appointed under the provisions of Insurance Regulatory and Development Authority Act, 1999 (41 of 1999) 49% Automatic upto 26%,; Government route beyond 26% and upto 49% F.7.2 Other Conditions .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

r is subject to compliance of the provisions of the Insurance Act, 1938 and the condition that Companies bringing in FDI shall obtain necessary license from the Insurance Regulatory & Development Authority of India for undertaking insurance activities. (d) An Indian insurance company shall ensure that its ownership and control remains at all times in the hands of resident Indian entities as determined/notified by Department of Fianncial Services. (e) Foreign portfolio investment in an Indian .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

terms as above to Insurance Brokers, Third Party Administrators, Surveyors and Loss Assessors and Other Insurance Intermediaries appointed under the provisions of the Insurance 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 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

reign Portfolio Investment , Indian Insurance Company , Indian Company , Indian Control of an Indian Insurance 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 (NBFCs) F.8.1 Foreign investment in NBFC is allowed under the automatic route in only the following activities: (i) Merc .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

he following minimum capitalisation norms: (i) US $0.5 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 sub .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

complying with the applicable 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 ac .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

overs only financial leases and not operating leases. FDI in operating leases is permitted up to 100 % on the automatic route. (2) The NBFC will have to comply with the guidelines of the relevant regulator/s, as applicable. F.8.3 White Label ATM Operations 100% Automatic Other Conditions: i. Any non-bank entity intending to set up a WLAs should have a minimum net worth of ₹ 100 crore as per the latest financial year s audited balance sheet, which is to be maintained at all times. ii. In ca .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

Regulatory Commission (Power Market) Regulations, 2010 49% Automatic F.9.2 Other conditions (i) FII purchases shall be restricted to secondary market only; (ii) No non-resident investor/entity, including persons acting in concert, will hold more than 5% of the equity in these companies; and (iii) The foreign investment would be in compliance with SEBI Regulations; other applicable laws/regulations; security and other conditionalities. F.10 Pension Sector 49% Automatic up to 26%; Government route .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

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 projects of this industry. ii. Medical device means :- a) Any instrument, apparatus, appliance, implant, material or other article, whether used alone or in combination, including the software, intended by its manufacturer to be used specially for human beings or animals for one .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

n 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 other article; c) a device which is reagent, reagent product, calibrator, control material, kit, instrument, apparatus, equipment or system whether used alone or in combination thereof intended to be used for examination and providing information for medical or diagnostic .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ities, (v) Railway Electrification, (vi) Signaling systems, (vii) Freight terminals, (viii) Passenger terminals, (ix) Infrastructure in industrial park pertaining to railway line/sidings including electrified railway lines and connectivities to main railway line and (x) Mass Rapid Transport Systems. 100% Automatic Note:- (i) Foreign Direct Investment in the abovementioned activities open to private participation including FDI is subject to sectoral guidelines of Ministry of Railways. (ii) Propos .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

atic route and there are no FDI linked performance conditions. ii. An Indian company or an LLP, having foreign investment, will be permitted to make downstream investment in another company or LLP engaged in sectors in which 100% FDI is allowed under the automatic route and there are no FDI-linked performance conditions. Onus shall be on the Indian company/ LLP accepting downstream investment to ensure compliance with the above conditions. iii. FDI in LLP is subject to the compliance of the cond .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

nt or registered / incorporated outside India shall be made by an inward remittance through the normal banking channel including by debit to an NRE or an FCNR account. 3. A person resident outside India who has acquired or purchased units in accordance with this Schedule may sell or transfer in any manner or redeem the units as per regulations framed by SEBI or directions issued by RBI. 4. Downstream investment by an Investment Vehicle shall be regarded as foreign investment if either the Sponso .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

hould be in the hands of sponsors and managers/investment managers , with the general exclusion to others. In case the sponsors and managers/investment managers of the AIF are individuals, for the treatment of downstream investment by such AIF as domestic, sponsors and managers/investment managers should be resident Indian citizens. Explanation 2: The extent of foreign investment in the corpus of the Investment Vehicle will not be a factor to determine as to whether downstream investment of the .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

of Schedule 9 of the principal Regulations as well as the extant FDI policy for foreign investment in LLPs. 7. An Alternative Investment Fund Category III with foreign investment shall make portfolio investment in only those securities or instruments in which a Registered Foreign Portfolio Investor is allowed to invest under the principal Regulations. 8. The Investment Vehicle receiving foreign investment shall be required to make such report and in such format to Reserve Bank of India or to SEB .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ted Liability Partnership, control shall mean right to appoint majority of the designated partners, where such designated partners, with specific exclusions to others, have control over all the policies of Limited Liability Partnership. 2. As corrected vide CORRIGENDUM notification dated 12-4-2016, before it was read as, (v) It is clarified that Foreign investment shall include all types of foreign investments i.e. FDI, investment by FIIs, FPIs, QFIs, NRIs, ADRs, GDRs, Foreign Currency Convertib .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ia.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); 4. As corrected vide CORRIGENDUM notification dated 12-4-2016, before it was read as, (ii) in paragraph 2, in sub-paragraph 4, after clause (iv), the following shall be added, namely: (v) by way of swap of shares, provided the company in which the investment is made is engaged in an automatic route sector, .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

RIGENDUM notification dated 12-4-2016, before it was read as, 6.1 Defence Industry subject to Industrial license under the Industries (Development & Regulation) Act, 1951 49% Government route up to 49% Above 49% under Government route on case to case basis, wherever it is likely to result in access to modern and 'state-of-art' technology in the country. 6. As corrected vide CORRIGENDUM notification dated 12-4-2016, before it was read as, 16.3 Single Brand product retail trading 100% .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

: a) Products to be sold should be of a 'Single Brand' only. b) Products 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. 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 cou .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

th the above condition. The requisite evidence should be filed with the RBI for the automatic route and SIA/FIPB for cases involving approval. d) 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 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

nd retail trading entity operating through brick and mortar stores, is permitted to undertake retail trading through e-commerce. 3) Application 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 are proposed to b .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

 

 

 

 

 



|| Home || Acts and Rules || Notifications || Circulars || Schedules || Tariff || Forms || Case Laws || Manuals ||

|| About us || Contact us || Disclaimer || Terms of Use || Privacy Policy || TMI Database || Members || Site Map ||

© Taxmanagementindia.com [A unit of MS Knowledge Processing Pvt. Ltd.] All rights reserved.

Go to Mobile Version