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Consolidated FDI Policy

FEMA - Circular of 2016 - Dated:- 7-6-2016 - Government of India Ministry of Commerce & Industry Department of Industrial Policy & Promotion Circular of 2016 Subject: The is attached. 2. This Circular will take effect from June 07, 2016 (Atul Chaturvedi) Joint Secretary to the Government of India D/o IPP F. No. 5(1)/2016-FC-1 Dated the June 07, 2016 Copy forwarded to: 1. Press Information Officer, Press Information Bureau- for giving wide publicity to the above circular. 2. NIC, DIPP for .....

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rom portfolio investment, has the connotation of establishing a lasting interest in an enterprise that is resident in an economy other than that of the investor. 1.1.2 The Government has put in place a policy framework on Foreign Direct Investment, which is transparent, predictable and easily comprehensible. This framework is embodied in the Circular on , which may be updated every year, to capture and keep pace with the regulatory changes, effected in the interregnum. The Department of Industri .....

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herwise therein. In case of any conflict, the relevant FEMA Notification will prevail. The procedural instructions are issued by the Reserve Bank of India vide A.P. (DIR Series) Circulars. The regulatory framework, over a period of time, thus, consists of Acts, Regulations, Press Notes, Press Releases, Clarifications, etc. 1.1.3 The present consolidation subsumes and supersedes all Press Notes/Press Releases/Clarifications/Circulars issued by DIPP, which were in force as on June 06, 2016 and ref .....

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Press Notes/Press Releases/Clarifications/Circulars prior to June 07, 2016, shall, in so far as it is not inconsistent with those Press Notes/Press Releases/Clarifications/Circulars, be deemed to have been done or taken under the corresponding provisions of this circular and shall be valid and effective. Chapter 2: Definitions 2.1 Definitions 2.1.1 AD Category-I Bank means a bank(Scheduled Commercial, State or Urban Cooperative) which is authorized under Section 10(1) of FEMA to undertake all cu .....

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or any other person for the time being authorized under sub-section (a) of section 10 of FEMA to deal in foreign exchange or foreign securities. 2.1.5 Capital means equity shares; fully, compulsorily & mandatorily convertible preference shares; fully, compulsorily & mandatorily convertible debentures and warrants. Note: The equity shares issued in accordance with the provisions of the Companies Act, as applicable, shall include equity shares that have been partly paid. Preference shares .....

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ransactions referred to in sub-section (3) of section 6 of FEMA. 2.1.7 Control shall include the right to appoint a majority of the directors or to control the management or policy decisions including by virtue of their shareholding or management rights or shareholders agreements or voting agreements. For the purposes of Limited Liability Partnership, control will mean right to appoint majority of the designated partners, where such designated partners, with specific exclusion to others, have co .....

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are known as Global Depository Receipts (GDRs). DRs are governed by Notification No. FEMA 330/ 2014-RB, issued by Reserve bank of India. 2.1.9 Employees Stock Option means the option given to the directors, officers or employees of a company or of its holding company or joint venture or wholly owned overseas subsidiary/subsidiaries, if any, which gives such directors, officers or employees, the benefit or right to purchase, or to subscribe for, the shares of the company at a future date at a pr .....

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mission to Overseas Corporate Bodies (OCBs) ) Regulations, 2003 (the Regulations) and immediately prior to such commencement was eligible to undertake transactions pursuant to the general permission granted under the Regulations. 2.1.11 Foreign Currency Convertible Bond (FCCB) means a bond issued by an Indian company expressed in foreign currency, the principal and interest of which is payable in foreign currency. FCCBs are issued in accordance with the Foreign Currency Convertible Bonds and ord .....

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is available at https://rbi.org.in/Scripts/BS_FemaNotifications.aspx?Id=174 Subsequent amendment notifications are available at https://rbi.org.in/Scripts/BS_FemaNotifications.aspx). 2.1.13 FEMA means the Foreign Exchange Management Act, 1999 (42 of 1999). 2.1.14 FIPB means the Foreign Investment Promotion Board constituted by the Government of India. Details of FIPB including filing application for FIPB can be accessed on the FIPB website www.fipb.gov.in. 2.1.15 Foreign Institutional Investor .....

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ign Venture Capital Investor (FVCI) means an investor incorporated and established outside India, which is registered under the Securities and Exchange Board of India (Foreign Venture Capital Investor) Regulations, 2000 {SEBI(FVCI) Regulations} and proposes to make investment in accordance with these Regulations. 2.1.18 Government route means that investment in the capital of resident entities by non-resident entities can be made only with the prior approval of Government (FIPB, Department of Ec .....

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an Company means a company incorporated in India under the Companies Act, as applicable. 2.1.22 Indian Venture Capital Undertaking (IVCU) means an Indian company: (i) whose shares are not listed in a recognised stock exchange in India; (ii) which is engaged in the business of providing services, production or manufacture of articles or things, but does not include such activities or sectors which are specified in the negative list by the SEBI, with approval of Central Government, by notification .....

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ng Company means an Indian Company holding only investments in other Indian company/(ies), directly or indirectly, other than for trading of such holdings /securities. 2.1.25 Investment on repatriable basis means investment, the sale proceeds of which, net of taxes, are eligible to be repatriated out of India and the expression investment on non-repatriable basis shall be construed accordingly. 2.1.26 Joint Venture (JV) means an Indian entity incorporated in accordance with the laws and regulati .....

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and use; or (b) bringing into existence of a new and distinct object or article or thing with a different chemical composition or integral structure. 2.1.29 Non-resident entity means a person resident outside India as defined under FEMA. 2.1.30 Non-Resident Indian (NRI) means an individual resident outside India who is a citizen of India or is an Overseas Citizen of India cardholder within the meaning of section 7 (A) of the Citizenship Act, 1955. Persons of Indian Origin cardholders registered .....

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e 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. 2.1.32 Person includes- (i) an individual, (ii)a Hindu undivided family, (iii) a company, (iv)a firm, (v) an association of persons or a body of individuals whether incorporated or not, (vi)every artificial juridical person, not falling within a .....

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in sub-clause (i) or (ii). 2.1.34 Person resident in India means- (i) a person residing in India for more than one hundred and eighty-two days during the course of the preceding financial year but does not include- (A) A person who has gone out of India or who stays outside India, in either case- (a) for or on taking up employment outside India, or (b) for carrying on outside India a business or vocation outside India, or (c) for any other purpose, in such circumstances as would indicate his int .....

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led by a person resident outside India, (iv) an office, branch or agency outside India owned or controlled by a person resident in India. 2.1.35 Person resident outside India means a person who is not a Person resident in India. 2.1.36 Portfolio Investment Scheme means the Portfolio Investment Scheme referred to in Schedules 2, 2A& 3 of FEMA (Transfer or Issue of Security by a Person Resident Outside India) Regulations, 2000. 2.1.37 RBI means the Reserve Bank of India established under the R .....

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c Zone Act, 2005. 2.1.42 SIA means Secretariat of Industrial Assistance in DIPP, Ministry of Commerce & Industry, Government of India. 2.1.43 Sweat Equity Shares means such equity shares as issued by a company to its directors or employees at a discount or for consideration other than cash, for providing their know-how or making available rights in the nature of intellectual property rights or value additions, by whatever name called. 2.1.44 Transferable Development Rights (TDR) means certif .....

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-ups, emerging or early-stage venture capital undertakings mainly involved in new products, new services, technology or intellectual property right based activities or a new business model and shall include an angel fund as defined under Chapter III-A of SEBI (AIF) Regulations, 2012. 1For details please refer to SEBI (FPI) Regulations, 2014 and the Foreign Exchange Management (Transfer or Issue of Security by a Person Resident outside India) (Second Amendment) Regulations, 2014 notified vide Not .....

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/activities which are prohibited. However, a citizen of Bangladesh or an entity incorporated in Bangladesh can invest only under the Government route. Further, a citizen of Pakistan or an entity incorporated in Pakistan can invest, only under the Government route, in sectors/activities other than defence, space and atomic energy and sectors/activities prohibited for foreign investment. 3.1.2 NRIs resident in Nepal and Bhutan as well as citizens of Nepal and Bhutan are permitted to invest in the .....

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sident entities, with the prior approval of Government of India if the investment is through Government route; and with the prior approval of RBI if the investment is through Automatic route. 3.1.4 A company, trust and partnership firm incorporated outside India and owned and controlled by NRIs can invest in India with the special dispensation as available to NRIs under the FDI Policy. 3.1.5 (i) Foreign Institutional Investor (FII) and Foreign Portfolio Investors (FPI) may in terms of Schedule 2 .....

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mpany concerned through a resolution by its Board of Directors followed by a special resolution to that effect by its General Body and subject to prior intimation to RBI. The aggregate FII/FPI investment, individually or in conjunction with other kinds of foreign investment, will not exceed sectoral/statutory cap. (ii) An Indian company which has issued shares to FIIs/FPIs under the FDI Policy for which the payment has been received directly into company s account should report these figures sep .....

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e India) Regulations, 2000, can invest/trade through a registered broker in the capital of Indian Companies on recognised Indian Stock Exchanges. 3.1.7 A SEBI registered Foreign Venture Capital Investor (FVCI) may contribute up to 100% of the capital of an Indian company engaged in any activity mentioned in Schedule 6 of Notification No. FEMA 20/2000, including startups irrespective of the sector in which it is engaged, under the automatic route. A SEBI registered FVCI can invest in a domestic v .....

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rship firm or an LLP, the investment can be made in the capital or through any profit-sharing arrangement) or units issued by a VCF or by a Category-I AIF either through purchase by private arrangement either from the issuer of the security or from any other person holding the security or on a recognised stock exchange.It may also set up a domestic asset management company to manage its investments. SEBI registered FVCIs are also allowed to invest under the FDI Scheme, as non-resident entities, .....

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can issue capital against FDI. 3.2.2 FDI in Partnership Firm/Proprietary Concern (i) A Non-Resident Indian (NRI) or a Person of Indian Origin (PIO) resident outside India can invest in the capital of a firm or a proprietary concern in India on non-repatriation basis provided; (a) Amount is invested by inward remittance or out of NRE/FCNR(B)/NRO account maintained with Authorized Dealers/Authorized banks. (b) The firm or proprietary concern is not engaged in any agricultural/plantation or real es .....

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ion and seek prior approval of Reserve Bank for making investment in 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. (iv) Restrictions: An NRI or PIO is not allowed to invest in a firm or proprietorship concern engaged in any agricultural/plantation activity or real estate business or print media. 3.2.3 FDI in Trusts FDI is not permitted in Trusts other than in VCF registered a .....

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ther company or LLP in sectors in which 100% FDI is allowed under the automatic route and there are no FDI-linked performance conditions. (iii) FDI in LLP is subject to the compliance of the conditions of LLP Act, 2008. 3.2.5 Investment Vehicle An entity being investment vehicle registered and regulated under relevant regulations framed by SEBI or any other authority designated for the purpose including Real Estate Investment Trusts (REITs) governed by the SEBI (REITs) Regulations, 2014, Infrast .....

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tan or Bangladesh), including an Registered Foreign Portfolio Investor (RFPI) or a non-resident Indian (NRI). 3.2.6 FDI in other Entities FDI in resident entities other than those mentioned above is not permitted. 3.3 Instruments of investments, issue/transfer of shares etc. Types of instruments for investment and provisions relating to issue/ transfer of shares are given at Annexure 2 & Annexure 3 respectively. Further, specific conditions of compliance for certain cases are given in Annexu .....

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f the Government of India is required. Proposals for foreign investment under Government route, are considered by FIPB. 3.4.2 Foreign investment 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 .....

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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. (v) It is clarified that Foreign investment shall include all types of foreign investments, direct and indirect, regardless of whether the said investments have been made under Schedule 1 (FDI), 2 (FII), 2A (FPI), 3 (NRI), 6 (F .....

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er Schedule 4 of FEMA (Transfer or Issue of Security by Persons Resident Outside India) Regulations will be deemed to be domestic investment at par with the investment made by residents. (vii) A company, trust and partnership firm incorporated outside India and owned and controlled by non-resident Indians will be eligible for investments under Schedule 4 of FEMA (Transfer or issue of Security by Persons Resident Outside India) Regulations and such investment will also be deemed domestic investme .....

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onditions may include norms for minimum capitalization, lock-in period, etc. The entry conditions in various sectors/activities are detailed in Chapter 5 of this Circular. 3.7 Other Conditions on Investment besides Entry Conditions 3.7.1 Besides the entry conditions on foreign investment, the investment/investors are required to comply with all relevant sectoral laws, regulations, rules, security conditions, and state/local laws/regulations. 3.8 Foreign Investment into/downstream Investment by e .....

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ct foreign investment, with conditions specified in paragraph 1.2 (v). (ii) Foreign Investment would have the same meaning as in Annexure-5. 3.8.3 Foreign investment into an Indian company engaged only in the activity of investing in the capital of other Indian company/ies (regardless of its ownership or control): 3.8.3.1 Foreign investment into an Indian company, engaged only in the activity of investing in the capital of other Indian company/ies/ LLP, will require prior Government/FIPB approva .....

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ce 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 companies for infusion of foreign investment for undertaking activities which are under Government route, regardless of the amount or extent of foreign investment. Further, as and when such a company commences business(s) or makes downstream i .....

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ed by resident entity/ies, 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: 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 entities, unde .....

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tments by eligible Indian entities/LLPs will be subject to the following conditions: (i) Such an entity is to notify SIA, 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); (ii) Downstream investment by way of induction of foreign investment in an existing Indian Company t .....

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s, from raising debt in the domestic market. Downstream investments through internal accruals are permissible, subject to the provisions of paragraphs 3.8.3 and 3.8.4.1. For the purposes of foreign investment policy, internal accruals will mean as profits transferred to reserve account after payment of taxes. 3.9 Remittance, Reporting and Violation 3.9.1 The Government has provided elaborated scheme for remittance, reporting and violation of FDI policy. These are available at Annexure-6. Chapter .....

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inistry of External Affairs 4.1.2 The Board would be able to co-opt other Secretaries to the Central Government and top officials of financial institutions, banks and professional experts of Industry and Commerce, as and when necessary. 4.2 Levels of Approvals for Cases under Government Route 4.2.1 The Minister of Finance who is in-charge of FIPB would consider the recommendations of FIPB on proposals with total foreign equity inflow of and below ₹ 5000 crore. 4.2.2 The recommendations of .....

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into the same entity, in the following cases: (i) Entities the activities of which had earlier required prior approval of FIPB/Cabinet Committee on Foreign Investment (CCFI)/CCEA and which had, accordingly, earlier obtained prior approval of FIPB/CCFI/CCEA for their initial foreign investment but subsequently such activities/sectors have been placed under automatic route; (ii) Entities the activities of which had sectoral caps earlier and which had, accordingly, earlier obtained prior approval o .....

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of 2005 and prior approval of the Government under the FDI policy is not required for any other reason/purpose; and (iv) Additional foreign investment into the same entity within an approved foreign equity percentage/or into a wholly owned subsidiary. 4.4 Online Filing of Applications for FIPB/Government s Approval 4.4.1 Guidelines for e-filing of applications, filing of amendment applications and instructions to applicants are available at FIPB s website (http://finmin.nic.in/) and (http://fipb .....

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nd Real Estate Investment Trusts (REITs) registered and regulated under the SEBI (REITs) Regulations 2014. 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 para 5.2). Foreign technology collaboration in any form including licensing for franchise, trademark, brand name, management contract is .....

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talization, it shall include share premium received along with the face value of the share, only when it is received by the company upon issue of the shares to the non-resident investor. Amount paid by the transferee during post-issue transfer of shares beyond the issue price of the share, cannot be taken into account while calculating minimum capitalization requirement. b) Sectoral cap i.e. the maximum amount which can be invested by foreign investors in an entity, unless provided otherwise, is .....

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ny equity holding by a person resident outside India resulting from conversion of any debt instrument under any arrangement shall be reckoned as foreign investment under the composite cap. c) Foreign investment in sectors under Government approval route resulting in transfer of ownership and/or control of Indian entities from resident Indian citizens to non-resident entities will be subject to Government approval. Foreign investment in sectors under automatic route but with conditionalities, res .....

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to either Government approval or compliance of sectoral conditions, as the case may be, if such investment does not result in transfer of ownership and/or control of Indian entities from resident Indian citizens to non-resident entities. Other foreign investments will be subject to conditions of Government approval and compliance of sectoral conditions as laid down in the FDI policy. f) Total foreign investment, direct and indirect, in an entity will not exceed the sectoral/statutory cap. g) Any .....

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ment 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 5.2.1.1 Other Conditions I. The term under controlled conditions covers the following: (i) Cultivation under controlled conditions for the categories of floriculture, horticulture, cultivati .....

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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 Practices and Minimum Standard Protocol. (b)Poultry breeding farms and hatcheries where micro-climate is controlled thr .....

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spaces with control of temperatures and climatic factors like humidity and artificial feeding during lean seasons. 5.2.2 Plantation Sector Sector/Activity % of Equity/ FDI Cap Entry Route 5.2.2.1 (i) Tea sector including tea plantations (ii) Coffee plantations (iii) Rubber plantations (iv) Cardamom plantations (v) Palm oil tree plantations (vi) Olive oil tree plantations Note: Besides the above, FDI is not allowed in any other plantation sector/activity. 100% Automatic 5.2.2.2 Other Condition Pr .....

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te mining for captive consumption by power projects, iron & steel and cement units and other eligible activities permitted under and subject to the provisions of Coal Mines (Nationalization) Act, 1973. (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 r .....

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ing 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 Protection) Rules, 2004 and the Atomic Energy (Safe Disposal of Radioactive Wastes) Rules, 1987. (ii) FDI will not be allowed in mining of pr .....

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d 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. 5.2.4 Petroleum & Natural Gas Sector/Activity % of Equity/ FDI Cap Entry Route 5.2.4.1 Exploration activities of oil and natural gas fields, infrastructure related to marketi .....

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2 Petroleum refining by the Public Sector Undertakings (PSU), without any disinvestment or dilution of domestic equity in the existing PSUs. 49% Automatic Manufacturing 5.2.5 Manufacturing: Subject to the provisions of the FDI policy, foreign investment in manufacturing sector is under automatic route. Further, a manufacturer is permitted to sell its products manufactured in India through wholesale and/or retail, including through e-commerce without Government approval. 5.2.6 Defence Sector/Acti .....

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hange in the ownership pattern or transfer of stake by existing investor to new foreign investor, will require Government approval. (ii) Licence applications will be considered and licences given by the Department of Industrial Policy & Promotion, Ministry of Commerce & Industry, in consultation with Ministry of Defence and Ministry of External Affairs. (iii) Foreign investment in the sector is subject to security clearance and guidelines of the M/o Defence. (v) Investee company should b .....

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perators (MSOs) operating at National or State or District level and undertaking upgradation of networks towards digitalization and addressability); (4)Mobile TV; (5)Headend-in-the Sky Broadcasting Service(HITS) 100% Automatic up to 49% Government route beyond 49% 5.2.7.1.2 Cable Networks(Other MSOs not undertaking upgradation of networks towards digitalization and addressability and Local Cable Operators (LCOs)) 100% Automatic up to 49% Government route beyond 49% 5.2.7.2 Broadcasting Content S .....

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iled guidelines on the Broadcasting Sector are given in Annexure-7. 5.2.8 Print Media Sector/Activity % of Equity/ FDI Cap Entry Route 5.2.8.1 Publishing of newspaper and periodicals dealing with news and current affairs 26% Government 5.2.8.2 Publication of Indian editions of foreign magazines dealing with news and current affairs 26% Government 5.2.8.2.1 Other Conditions (i) Magazine , for the purpose of these guidelines, will be defined as a periodical publication, brought out on non-daily ba .....

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idelines issued in this regard from time to time by Ministry of Information and Broadcasting. 100% Government 5.2.8.4Publication of facsimile edition of foreign newspapers 100% Government 5.2.8.4.1 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 facsimile edition of foreign newspapers can be undertaken only by an entity incorporated or registered in India under the provisio .....

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matic (b) Existing projects 100% Automatic up to 74% Government route beyond 74% 5.2.9.2Air Transport Services Sector/Activity % of Equity/ FDI Cap Entry Route (1) (a) Scheduled Air Transport Service/ Domestic Scheduled Passenger Airline (b) Regional Air Transport Service 49% FDI (100% for NRIs) Automatic (2)Non-Scheduled Air Transport Service 100% Automatic (3)Helicopter services/seaplane services requiring DGCA approval 100% Automatic 5.2.9.3Other services under Civil Aviation sector Sector/Ac .....

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tes; 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 defined in clause (2) of section 2 of the Aircraft Act, 1934; (ii) Aerodrome means any definite or limited ground or water area intended to be used, either wholly or in part, for the landing or departure of aircraft, and includes all buildings, sheds, .....

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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 heavier-than-air aircraft supported in flight by the reactions of the air on one or more power driven rotors on substantially vertical axis; (vii) Scheduled air transport service means an air transport service undertaken between the same two or more places and operated according to a published time table o .....

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aking 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 specified by the Ministry of Civil Aviation through the Aeronautical Information Circulars from time to time, and (iii) any other activity specified by the Central Government to be a part of either ramp handling or traffic handling. Other Conditions (a) Air Transport Services would include Domestic Scheduled Passenger Airlines; Non-Schedu .....

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ions: (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 s Permit can be granted only to a company: a) that is registered a .....

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to 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 5.2.9.2 (1) and 5.2.9.2 (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 para (c)(ii) above. (iii) The policy mentioned at para (c) above is not .....

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uction development project would be considered as a separate project for the purposes of FDI policy. Investment will be subject to the following conditions: (A) (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)Notwithstanding anything contained at (A) (i) above, a foreign investor will be permitted to exit and repatriate foreign investment before the completio .....

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es, as laid down in the applicable building control regulations, bye-laws, rules, and other regulations of the State Government/Municipal/Local Body concerned. (C) The Indian investee company will be permitted to sell only developed plots. For the purposes of this policy developed plots will mean plots where trunk infrastructure 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 necess .....

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onditions by the developer. Note: (i) It is clarified that FDI is not permitted in an entity which is engaged or proposes to engage in real estate business, construction of farm houses and trading in transferable development rights (TDRs). Real estate business means dealing in land and immovable property with a view to earning profit there from and does not include development of townships, construction of residential/ commercial premises, roads or bridges, educational institutions, recreational .....

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ate Governments. (iv) It is clarified that 100% FDI under automatic route is permitted in completed projects for operation and management of townships, malls/ shopping complexes and business centres. Consequent to foreign investment, transfer of ownership and/or control of the investee company from residents to non-residents 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 ther .....

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82 (4 of 1882) ; or (e) any transaction, by acquiring shares in a company or by way of any agreement or any arrangement or in any other manner whatsoever, which has the effect of transferring, or enabling the enjoyment of, any immovable property. 5.2.11Industrial Parks Sector/Activity % of Equity/ FDI Cap Entry Route Industrial Parks -new and existing 100% Automatic 5.2.11.1 Other conditions for investment in Industrial Parks are at Annexure-8. 5.2.12 Satellites- establishment and operation Sect .....

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cy on the sector, terms Private Security Agencies , Private Security and Armoured Car Service will have the same meaning as provided under PSAR Act, 2005, which is reproduced as under: "Private Security Agency" means a person or body of persons other than a government agency, department or organisation engaged in the business of providing private security services including training to private security guards or their supervisor or providing private security guards to any industrial or .....

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from time to time. 5.2.14 Telecom Services Sector/Activity % of Equity/ FDI Cap Entry Route Telecom Services (including Telecom Infrastructure Providers Category-I) 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 .....

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pt Other Service Providers , which are allowed 100% FDI on the automatic route. 5.2.15 Trading Sector/Activity % of Equity/ FDI Cap Entry Route 5.2.15.1 Cash & Carry Wholesale Trading/Wholesale Trading (including sourcing from MSEs) 100% Automatic 5.2.15.1.1Definition: 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 subordinat .....

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5.1.2 Guidelines for Cash & 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 val .....

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the case may be, is 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 fulfill any one of the 4 conditio .....

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o applicable regulations. (f) A wholesale/cash & carry trader can undertake single brand retail trading, subject to the conditions mentioned in para 5.2.15.3. 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 b .....

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ce entity- E-commerce entity means a company incorporated under the Companies Act 1956 or the Companies Act 2013 or a foreign company covered under section 2 (42) of the Companies Act, 2013 or an office, branch or agency in India as provided in section 2 (v) (iii) of FEMA 1999, owned or controlled by a person resident outside India and conducting the e-commerce business. iii) Inventory based model of e-commerce- Inventory based model of e-commerce means an e-commerce activity where inventory of .....

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s not permitted in inventory based model of e-commerce. 5.2.15.2.4 Other Conditions i) Digital & electronic network will include network of computers, television channels and any other internet application used in automated manner such as web pages, extranets, mobiles etc. ii) Marketplace e-commerce entity will be permitted to enter into transactions with sellers registered on its platform on B2B basis. iii) E-commerce marketplace may provide support services to sellers in respect of warehou .....

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for sale electronically on website should clearly provide name, address and other contact details of the seller. Post sales, delivery of goods to the customers and customer satisfaction will be responsibility of the seller. vii) In marketplace model, payments for sale may be facilitated by the e-commerce entity in conformity with the guidelines of the Reserve Bank of India. viii) In marketplace model, any warrantee/ guarantee of goods and services sold will be responsibility of the seller. ix) .....

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retail trading Sector/Activity % of Equity/ FDI Cap Entry Route Single Brand product retail trading 100% Automatic up to 49% Government route beyond 49% (1) Foreign Investment 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 managem .....

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therwise, 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 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 .....

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e 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 requirement would have to be met, in the first instance, as an average of five years total value of the goods purchased, beginning 1st April of the year of the commencement of the business i.e. opening of the first store. Thereafter, it would have to be met on an annual basis. For the purpose of ascertaining the sour .....

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dertake 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 be sold under a Single Brand . Any addition to the product/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 .....

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oducts in any manner i.e. wholesale, retail, including through e-commerce platforms. (iii) Indian manufacturer would be the investee company, which is the owner of the Indian brand and which manufactures in India, in terms of value, at least 70% of its products in house, and sources, at most 30% from Indian manufacturers. (iv) Indian 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 re .....

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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 tranche of US $ 100 million, shall be invested in 'back-end infrastructure' within three years, where back-end infrastructure will include capital expenditure on all activities, excluding that on front-end units; for instance, back-end infrastructure will include investment made t .....

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rchased 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 the time of installation, without providing for depreciation. The small industry status would be reckoned only at the time of first engagement with the retailer, and such industry shall continue to qualify as a small industry for this purpose, even if it outgrows the said investment of US $ 2.00 mill .....

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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 accounts, duly certified by statutory auditors. (vi) Retail sales outlets may be set up only in cities with a population of more than 10 lakh as per 2011 Census or 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 agglo .....

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. 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 list of States/Union Territories which have conveyed their agreement is at (2) below. Such agreement, in future, to permit establishment of retail outlets under this policy, would be conveyed to the Government of India through the Department of Industrial Policy & Promotion and additions would be made to the list at (2) below acc .....

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d guidelines, before being considered by the FIPB for Government approval. (2) List of States/Union Territories as mentioned in Paragraph 5.2.15.4(1)(viii) 1. Andhra Pradesh 2. Assam 3. Delhi 4. Haryana 5. Himachal Pradesh 6. Jammu & Kashmir 7. Karnataka 8. Maharashtra 9. Manipur 10. Rajasthan 11. Uttarakhand 12. Daman & Diu and Dadra and Nagar Haveli (Union Territories) 5.2.15.5 Duty Free Shops Sector/Activity % of Equity/ FDI Cap Entry Route Duty Free Shops 100% Automatic (i) Duty Free .....

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tivity % of Equity/ FDI Cap Entry Route Railway Infrastructure Construction, operation and maintenance of the following: (i) Suburban corridor projects through PPP, (ii) High speed train projects, (iii) Dedicated freight lines, (iv) Rolling stock including train sets, and locomotives/coaches manufacturing and maintenance facilities, (v) Railway Electrification, (vi) Signaling systems, (vii) Freight terminals, (viii) Passenger terminals, (ix) Infrastructure in industrial park pertaining to railwa .....

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for consideration on a case to case basis. Financial Services Foreign investment in other financial services, other than those indicated below, would require prior approval of the Government. 5.2.17 Asset Reconstruction Companies Sector/Activity % of Equity/ FDI Cap Entry Route 5.2.17.1 Asset Reconstruction Company (ARC) means a company registered with the Reserve Bank of India under Section 3 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, .....

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nstitutional / non-institutional investors will also be governed by the said Act, as amended from time to time. (iii) The total shareholding of an individual FII/FPI shall be below 10% of the total paid-up capital. (iv) FIIs / FPIs can invest in the Security Receipts (SRs) issued by ARCs registered with Reserve Bank of India. FIIs / FPIs may be allowed up to 100 per cent of each tranche in SRs issued by ARCs, subject to directions / guidelines of Reserve Bank of India. (v) All investments would .....

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r to September 16, 2003 by erstwhile OCBs, and continue to include IPOs, Private placements, GDR/ADRs and acquisition of shares from existing shareholders. (2) The aggregate foreign investment in a private bank from all sources will be allowed up to a maximum of 74 per cent of the paid up capital of the Bank. At all times, at least 26 per cent of the paid up capital will have to be held by residents, except in regard to a wholly-owned subsidiary of a foreign bank. (3) The stipulations as above w .....

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Acts 1970/80. This ceiling (20%) is also applicable to the State Bank of India and its associate Banks. 20% Government 5.2.20Credit Information Companies (CIC) Sector/Activity % of Equity/ FDI Cap Entry Route 5.2.20.1 Credit Information Companies 100% Automatic 5.2.20.2 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 .....

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s in Securities Markets, namely, stock exchanges, commodity exchanges, depositories and clearing corporations, in compliance with SEBI Regulations 49% Automatic 5.2.21.2 Other Conditions (i) FII/FPI can invest only through purchases in the secondary market. (ii) No non-resident investor/entity, including persons acting in concert, will hold more than 5% of the equity in commodity exchanges. (iii) Foreign investment in commodity exchanges will be subject to the guidelines of the Central Governmen .....

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iation under the provisions of the Forward Contracts (Regulation) Act, 1952, as amended from time to time, to provide exchange platform for trading in forward contracts in commodities. (ii) recognized association means an association 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 regulatin .....

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nsultation with SEBI by the Central Government, but does not include securities. 5.2.22 Insurance Sector/Activity % of Equity/ FDI Cap Entry Route 5.2.22.1 (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 5.2.22.2 Other Conditions (a) No Indian Insurance company shall allow the aggreg .....

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r shall be subject to compliance with the provisions of the Insurance Act, 1938 and the condition that Companies receiving FDI shall obtain necessary license /approval from the Insurance Regulatory & Development Authority of India for undertaking insurance and related 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 by Department of Financial Services/ Insurance Regulatory and D .....

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icing guidelines specified by Reserve Bank of India under the FEMA Regulations. (g) The foreign equity investment cap of 49 percent shall apply on the same 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 all .....

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pplicable in respect of bank promoted insurance companies. (j) Terms Control , Equity Share Capital , Foreign Direct Investment (FDI), Foreign Investors , Foreign 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 .....

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eign equity investment as per Section 24 of the PFRDA Act shall obtain necessary registration from the Pension Fund Regulatory and Development Authority and comply with other requirements as per the PFRDA Act, 2013 and Rules and Regulations framed under it for so participating in Pension Fund Management activities in India. (iii) Wherever such foreign equity investment involves control or ownership by the foreign investor or, transfer of control or ownership of an existing pension fund from resi .....

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ee Indian pension fund company. The meaning of ownership and control would be as per the Foreign Direct Investment policy. 5.2.24 Power Exchanges Sector/Activity % of Equity/ FDI Cap Entry Route 5.2.24.1 Power Exchanges registered under the Central Electricity Regulatory Commission (Power Market) Regulations, 2010. 49% Automatic 5.2.24.2 Other Conditions (i) FII/FPI purchases shall be restricted to secondary market only; (ii) No non-resident investor/entity, including persons acting in concert, .....

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ce sheet, which is to be maintained at all times. (ii) In case the entity is also engaged in any other 18 NBFC activities, then the foreign investment in the company setting up WLA, shall also have to comply with the minimum capitalization norms for foreign investments in NBFC activities as provided in Para 5.2.26.2.. (iii) FDI in the WLAO will be subject to the specific criteria and guidelines issued by RBI vide Circular No. DPSS.CO.PD.No. 2298/02.10.002/2011-2012, as amended from time to time. .....

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i) Housing Finance (xiv) Forex Broking (xv) Credit Card Business (xvi) Money Changing Business (xvii) Micro Credit (xviii) Rural Credit 100% Automatic 5.2.26.2 Other Conditions (1) Investment would be subject to the 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 m .....

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perating NBFCs that have 75% or less than 75% foreign investment can also set up subsidiaries for undertaking other NBFC activities, subject to the subsidiaries also 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 .....

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gn of various payment products such as credit cards, charge cards, debit cards, stored value cards, smart card, value added cards etc. (ii) Leasing & Finance covers 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. Others 5.2.27 Pharmaceuticals Sector/Activity % of Equity/ FDI Cap Entry Route 5.2.27.1 Greenfield 100% Automatic 5 .....

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automatic route is permitted for manufacturing of medical devices. The above mentioned 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 or more of the specific purposes of- (aa)diagnosis, .....

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munological 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 purposes by means of in vitro examination of specimens d .....

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e documents mentioned in item No. 5 of the undertaking enclosed to this form. All fields are mandatory) . Permanent Account Number (PAN) of the investee company given by the Income Tax Department Date of issue of shares / convertible debentures/others No. Particulars (In Block Letters) 1. Name of the Investee Company Address of the Registered Office of the Investee Company with City, District and State clearly mentioned Telephone Fax e-mail State Registration No. given by Registrar of Companies .....

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er 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 / collaborator2* (Details of foreign residence to be given. Indian address if any should not be given) Name Address Country Constitution / Nature of the investing Entity [Specify whether 1. Individual 2. Company (Please specify if erstwhile OCB .....

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from the official reserves of the monetary authorities. # The investment/s is/are made by FVCI under FDI Scheme in terms of Schedule I to Notification No. FEMA 20/2000-RB dated May 3, 2000. 4 Particulars of Shares / 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 lum .....

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n case the issue is against conversion of ECB or royalty or against import of capital goo s by units in SEZ, a Chartered Accountant's Certificate certifying the amount outstanding on the date of conversion (c) Break up of premium Amount Control Premium Non competition fee Others@ Total @ Please specify the nature (d) Total inflow (in Rupees) on account of issue of shares / convertible debentures/others to non- residents (including premium, if any) vide Remittance throughAD: Debit to NRE/FCNR .....

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g Equity Compulsorily convertible Preference Shares/ Debentures/others Investor category No. of Amount (Face % No. of Amount (Face % a) Non-Resident 01 Individuals 02 Companies 03 FIIs 04 FVCIs# 05 Foreign Trusts 06 Private Equity 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: .....

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f whichever is not applicable). a) Shares issued on rights basis to non-residents are in conformity with Regulation 6 of the RBI Notification No FEMA 20/2000-RB dated 3rd May 2000, as amended from time to time. OR b) Shares 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 condi .....

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mpliance with Paragraph 9 (1) (B) of Schedule 1 to Notification No. FEMA 20/2000-RB dated May 3, 2000: (i) A certificate from our Company Secretary certifying that (a) all the requirements of the Companies Act, 1956 have 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 recei .....

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gnature of the Applicant)* :___________________________________________ (Name in Block Letters) :___________________________________________ (Designation of the signatory) :___________________________________________ Place: Date: (* To be signed by Managing Director/Director/Secretary of the Company) CERTIFICATE TO BE FILED BY THE COMPANY SECRETARY 4 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 .....

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le 1 to Notification No. FEMA 20/2000-RB dated May 3, 2000. (Name & Signature of the Company Secretary) (Seal) FOR USE OF THE RESERVE BANK ONLY: Registration Number for the FC-GPR: Unique Identification Number allotted to the Company at the time of reporting receipt of remittance - #The investment/s is/are made by FVCI under FDI Scheme in terms of Schedule I to Notification No. FEMA 20/2000-RB dated May 3, 2000. 4If the company doesn t have full time Company Secretary, a certificate from pra .....

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should not in any case be lower than the fair value worked out, at the time of issuance of such instruments, in accordance with the extant FEMA regulations [as per any internationally accepted pricing methodology on arm s length basis for the unlisted companies and valuation in terms of SEBI (ICDR) Regulations, for the listed companies]. 1.1 Optionality clauses are allowed in equity shares, fully, compulsorily and mandatorily convertible debentures and fully, compulsorily and mandatorily convert .....

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res i.e. non-convertible, optionally convertible or partially convertible for issue of which funds have been received on or after May 1, 2007 are considered as debt. Accordingly all norms applicable for ECBs relating to eligible borrowers, recognized lenders, amount and maturity, end-use stipulations, etc. shall apply. Since these instruments would be denominated in rupees, the rupee interest rate will be based on the swap equivalent of London Interbank Offered Rate (LIBOR) plus the spread as pe .....

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ory Receipts(DRs) a) FCCBs/DRs may be issued in accordance with the Scheme for issue of Foreign Currency Convertible Bonds and Ordinary Shares (Through Depository Receipt Mechanism) Scheme, 1993 and DR Scheme 2014 respectively, as per the guidelines issued by the Government of India there under from time to time. b) DRs are foreign currency denominated instruments issued by a foreign Depository in a permissible jurisdiction against a pool of permissible securities issued or transferred to that f .....

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o issue eligible instruments to person resident outside India under Schedules 1, 2, 2A, 3, 5 and 8 of Notification No. FEMA 20/2000-RB dated May 3, 2000, as amended from time to time. e) The aggregate of eligible securities which may be issued or transferred 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 relevant regulations framed under FEMA, 1999. f) The .....

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. 6. (i) Two-way Fungibility Scheme: A limited two-way Fungibility scheme has been put in place by the Government of India for ADRs/GDRs. Under this Scheme, a stock broker in India, registered with SEBI, can purchase shares of an Indian company from the market for conversion into ADRs/GDRs based on instructions received from overseas investors. Re-issuance of ADRs/GDRs would be permitted to the extent of ADRs/GDRs which have been redeemed into underlying shares and sold in the Indian market. (ii .....

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estic) accounts in India by the resident shareholders who have tendered such shares for conversion into ADRs/GDRs. Annexure-3 Provisions Relating to Issue/ Transfer of Shares 1. The capital instruments should be issued within 180 days from the date of receipt of the inward remittance received through normal banking channels including escrow account opened and maintained for the purpose or by debit to the NRE/FCNR (B) account of the non-resident investor. In case, the capital instruments are not .....

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t of consideration outstanding beyond a period of 180 days from the date of receipt may be considered by the RBI, on the merits of the case. 2. Issue price of shares Price of shares issued to persons resident outside India under the FDI Policy, shall not be less than - a. the price worked out in accordance with the SEBI guidelines, as applicable, where the shares of the company are listed on any recognised stock exchange in India; b. the fair valuation of shares done by a SEBI registered Merchan .....

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ian company in compliance with the provisions of the Companies Act, as applicable, by way of subscription to its Memorandum of Association, such investments may be made at face value subject to their eligibility to invest under the FDI scheme. 3. Foreign Currency Account Indian companies which are eligible to issue shares to persons resident outside India under the FDI Policy may be allowed to retain the share subscription amount in a Foreign Currency Account, with the prior approval of RBI. 4. .....

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person resident outside India (other than NRI and erstwhile OCB) may transfer by way of sale or gift, the shares or convertible debentures to any person resident outside India (including NRIs). Government approval is not required for transfer of shares in the investee company from one non-resident to another non-resident in sectors which are under automatic route. In addition, approval of Government will be required for transfer of stake from one non-resident to another non-resident in sectors .....

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I. (e) A person resident in India can transfer by way of sale, shares/ convertible debentures (including transfer of subscriber s shares), of an Indian company under private arrangement to a person resident outside India, subject to the guidelines given in para 5.2 and Section 1 of this Annexure. (f) General permission is also available for transfer of shares/convertible debentures, by way of sale under private arrangement by a person resident outside India to a person resident in India, subject .....

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gory-I Bank, within 60 days from the date of receipt of the amount of consideration. The onus of submission of the Form FC-TRS within the given timeframe would be on the transferor/transferee, resident in India. However, in cases where the NR investor, including an NRI, acquires shares on the stock exchanges under the FDI scheme, the investee company would have to file form FC-TRS with the AD Category-I bank. (ii) The sale consideration in respect of equity instruments purchased by a person resi .....

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nsaction along with the Form FC-TRS. (iii) A person resident outside India including a Non-Resident Indian investor who has already acquired and continues to hold the control in accordance with the SEBI (Substantial Acquisition of Shares and Takeover) Regulations can acquire shares of a listed Indian company on the stock exchange through a registered broker under FDI scheme provided that the original and resultant investments are in line with the extant FDI policy and FEMA regulations in respect .....

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gory-I banks have also been permitted to open and maintain, without prior approval of RBI, non-interest bearing Escrow accounts in Indian Rupees in India on behalf of residents and/or non-residents, towards payment of share purchase consideration and/or provide Escrow facilities for keeping securities to facilitate FDI transactions subject to the63terms and conditions specified by RBI. SEBI authorised Depository Participants have also been permitted to open and maintain, without prior approval o .....

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d in paragraph 5.2 below, the following cases require prior approval of RBI: (i) Transfer of capital instruments from resident to non-residents by way of sale where: (a) Transfer is at a price which falls outside the pricing guidelines specified by the Reserve Bank from time to time and the transaction does not fall under the exception given in para 5.2. (b) Transfer of capital instruments by the non-resident acquirer involving deferment of payment of the amount of consideration. Further, in cas .....

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his Annexure should be enclosed. Reserve Bank considers the following factors while processing such applications: (a) The proposed transferee (donee) is eligible to hold such capital instruments 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 mutual fund scheme. (c) The applicable sectoral cap limit in the Indian compa .....

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ar. (f) Such other conditions as stipulated by Reserve Bank in public interest from time to time. (iii) Transfer of shares from NRI to non-resident. 5.2 In the following cases, approval of RBI is not required: A. Transfer of shares from a Non-Resident to Resident under the FDI scheme where the pricing guidelines under FEMA, 1999 are not met provided that: i. The original and resultant investment are in line with the extant FDI policy and FEMA regulations in terms of sectoral caps, conditionaliti .....

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be filed with the AD bank. B. Transfer of shares from Resident to Non-Resident: i) where the transfer of shares requires the prior approval of the Government conveyed through FIPB as per the extant FDI policy provided that: a) the requisite approval of the FIPB has been obtained; and b) the transfer of shares adheres with the pricing guidelines and documentation requirements as specified by the Reserve Bank of India from time to time. ii) where the transfer of shares attract SEBI (SAST) Regulat .....

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n is compliant with the specific/explicit, extant and relevant SEBI regulations/guidelines (such as IPO, Book building, block deals, delisting, exit, open offer/substantial acquisition/SEBI SAST); and c) Chartered Accountants Certificate to the effect that compliance with the relevant SEBI regulations/guidelines as indicated above is attached to the form FC-TRS to be filed with the AD bank. iv) where the investee company is in the financial sector provided that: a) Any fit and proper/due diligen .....

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Commercial Borrowings (ECB) (excluding those deemed as ECB) in convertible foreign currency into equity shares/fully compulsorily and mandatorily convertible preference shares, subject to the following conditions and reporting requirements: (a) The activity of the company is covered under the Automatic Route for FDI or the company has obtained Government 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) .....

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fee, royalty due for payment, subject to entry route, sectoral cap and pricing guidelines (as per the provision of para 2 above)and compliance with applicable tax laws. Further, issue of equity shares against any other funds payable by the investee company, remittance of which does not require prior permission of the Government of India or Reserve Bank of India under FEMA, 1999 or any rules/ regulations framed or directions issued thereunder is permitted, provided that: (I) The equity shares sh .....

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ion shall be subject to tax laws as applicable to the funds payable and the conversion to equity should be net of applicable taxes. (iii) Issue of equity shares under the FDI policy is allowed under the Government route for the following: (I) import of capital goods/ machinery/ equipment (excluding second-hand machinery), subject to compliance with the following conditions: (a)Any import of capital goods/machinery etc., made by a resident in India, has to be in accordance with the Export/Import .....

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following conditions: (a) Submission of FIRC for remittance of funds by the overseas promoters for the expenditure incurred. (b) Verification and certification of the pre-incorporation/pre-operative expenses by the statutory auditor. (c) Payments should be made by the foreign investor to the company directly or through the bank account opened by the foreign investor as provided under FEMA Regulations. (d) The applications, complete in all respects, for capitalization being made within the perio .....

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t 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 parties involved in the transaction shall comply with the guidelines set out below. 1.2 Parties involved in the transaction are(a) seller (resident/non-resident), (b) buyer (resident/non-resident), (c) duly authorized agent/s of the seller and/or buyer, (d) Authoris .....

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ident investor on exercising option/right in shares or compulsorily & mandatorily convertible preference shares or fully, compulsorily & mandatorily convertible debentures. 2.2 Transfer by Resident to Non-resident (i.e. to foreign national, NRI, FII, FPI and incorporated non-resident entity other than erstwhile OCB) Price of shares transferred by way of sale by resident to a non-resident where the shares of an Indian company are: (a) listed on a recognized stock exchange in India ,shall .....

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g methodology on arm s length basis. The price per share arrived at should be certified by a SEBI registered Merchant Banker or a Chartered Accountant. 2.3 Transfer by Non-resident(i.e. by incorporated non-resident entity, erstwhile OCB, foreign national, NRI, FII, FPI)to Resident Sale of shares by a non-resident to resident shall be in accordance with Regulation 10 B (2) of Notification No. FEMA 20/2000-RB dated May 3, 2000 which shall not be more than the minimum price at which the transfer of .....

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d in the transaction would have the responsibility to ensure 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. 4. Method of payment and remittance/credit of sale proceeds 4.1 The sale consideration in respect of the shares purchased by a person re .....

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e proceeds of shares (net of taxes) sold by a person resident outside India may be remitted outside India. In case of FII/FPI, the sale proceeds may be credited 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. 4.3 The .....

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ain and keep on record the following documents: 5.1 For sale of shares by a person resident in India i. Consent Letter duly signed by the seller and buyer 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 L .....

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er or their duly appointed agent from the company, where the sectoral cap/limits have been prescribed. iv. Certificate indicating fair value of shares from 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/sub account to the effect t .....

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igned by their duly appointed agent the Power of Attorney Document authorizing the agent to purchase/sell shares by the seller/buyer. In case there is no formal Sale Agreement, letters exchanged to this 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 NRE/NRO account, as applicable. iv. Certificate indicating fair value of shares from a Charte .....

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of the Form FC-TRS within the given timeframe would be on the transferor / transferee, resident in India. The AD Category-I bank, would forward the same to its link office. The link office would consolidate the Forms and submit a monthly report to the Reserve Bank5. For the purpose the Authorized Dealers may designate branches to specifically handle such transactions. These branches could be staffed with adequately trained staff for this purpose to ensure that the transactions are put through s .....

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has been made by the transferee. On receipt of the certificate from the AD, the company may record the transfer in its books. 6.3T he 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. 6.4 In addition the AD 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 t .....

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ai in soft copy (in MS- Excel) by e-mail to fdidata@rbi.org.in 6.5 Shares purchased / sold by FIIs/FPIs under private arrangement will be by debit /credit to their Special Non-Resident Rupee Account. Therefore, the transaction should also be reported in Form LEC by the designated bank of the FII/FPI concerned. 6.6 Shares/convertible debentures of Indian companies purchased under Portfolio Investment Scheme by NRIs, OCBs cannot be transferred, by way of sale under private arrangement. 6.7 On rece .....

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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 shares and convertible debentures, a certificate from a Chartered Accountant on the value of such securities according to the guidelines issued by Securities & Exchange Board of I .....

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exceed 5 per cent of the paid up capital of the company. 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 rupee equivalent of USD 50,000during a financial year*. *RBI s A.P. (DIR Series) Circular No. 14 Dated 15.09.2011 ix. A declaration from the donee accepting partly paid shares or warrants that donee is aware of the .....

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nge Department, Foreign Investment Division, Central Office, Mumbai Annexure-4 Specific Conditions in Certain Cases 1. Issue of Rights/Bonus Shares FEMA provisions allow Indian companies to freely issue Rights/Bonus shares to existing non-resident shareholders, subject to adherence to sectoral cap, if any. However, such issue of bonus/rights shares has to be in accordance with other laws/statutes like the Companies Act, as applicable, SEBI (Issue of Capital and Disclosure Requirements) Regulatio .....

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while OCBs OCBs have been de-recognised as a class of investors from September 16, 2003. Therefore companies desiring to issue rights share to such erstwhile OCBs will have to take specific prior permission from RBI. As such, entitlement of rights share is not automatically available to erstwhile OCBs. However bonus shares can be issued to erstwhile OCBs without the approval of RBI. 3. Additional allocation of rights share by residents to non-residents Existing non-resident shareholders are allo .....

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erger/Demerger/Amalgamation Mergers/demergers/ amalgamations of companies in India are usually governed by an order issued by a competent Court on the basis of the Scheme submitted by the companies undergoing merger/demerger/amalgamation. Once the scheme of merger or demerger 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, s .....

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debentures Indian companies are allowed to issue non-convertible/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 no-objection from the Income Tax Authorities. 5. Issue of Employees Stock Option Scheme (ESOPs) / Sweat .....

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Companies Act 2013, as the case may be. b. The employee s stock option / sweat equity shares issued to non-resident employees/directors under the applicable rules/regulations are in compliance with the sectoral cap applicable to the said company. c. Issue of employee s stock option / sweat equity shares by a company where foreign investment is under the approval route shall require prior approval of the Foreign Investment Promotion Board (FIPB) of Government of India. d. Issue of employee s stoc .....

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urn as per the Form-ESOP. 6. Share Swap In cases of investment by way of swap of shares, irrespective of the amount, valuation of the shares 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 host country. Approval of the Government will also be a prerequisite for investment by swap of shares for sector under Government approval route. No approval of the Government is required for invest .....

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ue the no objection for such a pledge after having satisfied itself that the external commercial borrowing is in line with the extant FEMA regulations for ECBs and that: i) the loan agreement has been signed by both the lender and the borrower, ii) there exists a security clause in the Loan Agreement requiring the borrower to create charge on financial securities, and iii) the borrower has obtained Loan Registration Number (LRN) from the Reserve Bank: and the said pledge would be subject to the .....

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bank in India to secure credit facilities being extended to the resident investee company for bonafide business purpose, subject to the following conditions: (i) in case of invocation of pledge, transfer of shares should be in accordance with the FDI policy in vogue at the time of creation of pledge; (ii) submission of a declaration/ annual certificate from the statutory auditor of the investee company that the loan proceeds will be / have been utilized for the declared purpose; (iii) the India .....

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rom an overseas bank; (ii) loan is utilized for genuine business purposes overseas and not for any investments either directly or indirectly in India; (iii) overseas investment should not result in any capital inflow into India; (iv) in case of invocation of pledge, transfer should be in accordance with the FDI policy in vogue at the time of creation of pledge; and (v) submission of a declaration/annual certificate from a Chartered Accountant/ Certified Public Accountant of the non-resident borr .....

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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. 1.1 For the purpose of computation of indirect foreign investment in an Indian company, foreign investment in an Indian company shall include all types of foreign investments i.e. FDI; investment by FIIs (holding as on March 31), FPIs (holding as on March 31); NRIs; ADRs; GDRs; Forei .....

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direct foreign investment (i) Counting of direct foreign investment All investment directly by a non-resident entity into the Indian company/ LLP would be counted towards foreign investment. (ii) Counting of indirect foreign investment (a) The foreign investment through the investing Indian company/LLP would not be considered for calculation of the indirect foreign investment in case of Indian companies/LLPs which are owned and controlled by resident Indian citizens and/or Indian Companies/LLPs .....

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l determine whether the sponsor or manager or investment manager is foreign owned and controlled. (b) For cases where condition (a) above is not satisfied or if the investing company is owned or controlled by non-resident entities , the entire investment by the investing company/LLP into the subject Indian Company would be considered as indirect foreign investment, provided that, as an exception, the indirect foreign investment in only the 100% owned subsidiaries of operating-cum-investing/inves .....

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llustrate, if the indirect foreign investment is being calculated for Company X which has investment through an investing Company Y having foreign investment, the following would be the method of calculation: (A) where Company Y has foreign investment less than 50%- Company X would not be taken as having any indirect foreign investment through Company Y. (B) where Company Y has foreign investment of say 75% and: (I) invests 26% in Company X, the entire 26% investment by Company Y would be treate .....

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ompany X. (iii) The total foreign investment would be the sum total of direct and indirect foreign investment. (iv) The above methodology of calculation would apply at every stage of investment in Indian companies and thus to each and every Indian company. (v) Additional conditions (a) The full details about the foreign investment including ownership details etc. in Indian company(s) and information about the control of the company(s) would be furnished by the Company(s) to the Government of Ind .....

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ll consider such inter-se agreements for determining ownership and control when considering the case for approval of foreign investment. (c) In all sectors attracting sectoral caps, the balance equity i.e. beyond the sectoral foreign investment cap, would specifically be beneficially owned by/held with/in the hands of resident Indian citizens and Indian companies, owned and controlled by resident Indian citizens. (d) In the I& B sector where the sectoral cap is up to 49%, the company would n .....

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, used in this clause, will include any or a combination of the following: (I) In the case of an individual shareholder, (aa) The individual shareholder, (bb) A relative of the shareholder within the meaning of Section 2 (77) of Companies Act, 2013. (cc) A company/group of companies in which the individual shareholder/HUF to which he belongs 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 manage .....

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ingle unit in managing the matters of the applicant company. (e) If a declaration is made by persons as per section 187C of the Companies Act,1956 or section 89 of the Companies Act, 2013, as the case may be about a beneficial interest being held by a non-resident entity, then even though the investment may be made by a resident Indian citizen, the same shall be counted as foreign investment. 1.3 The above mentioned policy and methodology would be applicable for determining the total foreign inv .....

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Investment Vehicle shall be regarded as foreign investment if either the Sponsor or the Manager or the Investment Manager is not Indian owned and controlled as defined in Regulation 14 of the principal Regulations as defined in RBI Notification No. 362/2015-RB dated February 15, 2016. Provided that for sponsors or managers or investment managers organized in a form other than companies or LLPs, SEBI shall determine whether the sponsor or manager or investment manager is foreign owned and contro .....

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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 Investment Vehicle concerned is foreign investment or not. (ii) Downstream investment by an Investment Vehicle that is reckoned as foreign investment shall have to conform to the sectoral caps and conditions / restrictions, if any, as applicable to the company in which the downstream investment is made as per the FDI Policy. (iii) Downstream invest .....

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receiving foreign investment shall be required to make such report and in such format to Reserve Bank of India or to SEBI as may be prescribed by them from time to time. 1.4 Any foreign investment already made in accordance with the guidelines in existence prior to February 13, 2009 (date of issue of Press Note 2 of 2009) would not require any modification to conform to these guidelines. All other investments, past and future, would come under the ambit of these new guidelines. Annexure-6 Remitt .....

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ity has been held on repatriation basis, the sale of security has been made in accordance with the prescribed guidelines and NOC/tax clearance certificate from the Income Tax Department has been produced. (iii) 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 compa .....

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sions of the Companies Act, as applicable. d. In case of winding up otherwise than by a court, an auditor's certificate to the effect that there are no legal proceeding spending in any court in India against the applicant or the company under liquidation and there is no legal impediment in permitting the remittance. 1.2 Repatriation of Dividend Dividends are freely repatriable without any restrictions (net after Tax deduction at source or Dividend Distribution Tax, if any, as the case may be .....

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eporting of FDI 2.1 Reporting of Inflow (i) An Indian company receiving investment from outside India for issuing shares/convertible debentures/preference shares under the FDI Scheme, should report the details of the amount of consideration to the Regional Office concerned of the Reserve Bank not later than 30 days from the date of receipt in the Advance Reporting Form as in Section 1 of this Annexure. (ii) Indian companies are required to report the details of the receipt of the amount of consi .....

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h a report not later than 30 days from the date of receipt of each call payment. 2.2 Reporting of issue of shares (i) After issue of shares (including bonus and shares issued on rights basis and shares issued under ESOP)/fully, mandatorily & compulsorily convertible debentures/fully, mandatorily & compulsorily convertible preference shares, the Indian company has to file Form FC-GPR, not later than 30 days from the date of issue of shares. (ii) Form FC-GPR has to be duly filled up and si .....

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eligible to issue shares under these Regulations; and (D) the company has all original certificates issued by authorized dealers in India evidencing receipt of amount of consideration. Note: For companies with paid up capital with less than ₹ 5 crore, the above mentioned certificate can be given by a practicing company secretary. (b) A certificate from SEBI registered Merchant Banker or Chartered Accountant indicating the manner of arriving at the price of the shares isIndiad to the person .....

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Indian company, directly with the Reserve Bank. This is an annual return to be submitted by 15th of July every year, pertaining to all investments by way of direct/portfolio investments/reinvested earnings/other capital in the Indian company made during the previous years (i.e. the information submitted by 15th July will pertain to all the investments made in the previous years up to March 31). The details of the investments to be reported would include all foreign investments made into the com .....

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. 2.3 Reporting of transfer of shares Reporting of transfer of shares between residents and non-residents and vice- versa is to be done in Form FC-TRS (Section-4). The Form FC-TRS should be submitted to the AD Category-I bank, within 60 days from the date of receipt of the amount of consideration. The onus of submission of the Form FC-TRS within the given timeframe would be on the transferor/transferee, resident in India. However, in cases where the NR investor, including an NRI, acquires shares .....

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equity, the company shall report the conversion in Form FC-GPR to the Regional Office concerned of the Reserve Bank 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 .....

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e domestic custodian shall report the issue/transfer of sponsored/unsponsored depository receipts as per DR Scheme 2014 in Form DRR as given in Section-5 within 30 days of close of the issue/ program. 3. Adherence to Guidelines/Orders and Consequences of Violation FDI is a capital account transaction and thus any violation of FDI regulations are covered by the penal provisions of the FEMA. Reserve Bank of India administers the FEMA and Directorate of Enforcement under the Ministry of Finance is .....

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k of India, he shall, upon adjudication, be liable to a penalty up to thrice the sum involved in such contraventions where such amount is quantifiable, or up to two lakh Rupees where the amount is not quantifiable, and where such contraventions is a continuing one, further penalty which may extend to five thousand Rupees for every day after the first day during which the contraventions continues. (ii) Where a person committing a contravention of any provisions of this Act or of any rule, directi .....

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hority adjudging any contraventions under 3.1(i) above, may, if he thinks fit in addition to any penalty which he may impose for such contravention direct that any currency, security or any other money or property in respect of which the contravention has taken place shall be confiscated to the Central Government. 3.2 Adjudication and Appeals (i) For the purpose of adjudication of any contravention of FEMA, the Ministry of Finance as per the provisions contained in the Foreign Exchange Managemen .....

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) Rules, 2000, an Appellate Authority/ Appellate Tribunal to hear appeals against the orders of the adjudicating authority. 3.3 Compounding Proceedings Under the Foreign Exchange (Compounding Proceedings) Rules 2000, the Central Government may appoint Compounding Authority an officer either from Enforcement Directorate or Reserve Bank of India for any person contravening any provisions of the FEMA. The Compounding Authorities are authorized to compound the amount involved in the contravention to .....

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an order of compounding after affording an opportunity of being heard to all the concerns as expeditiously and not later than 180 days from the date of application made to the Compounding Authority. Compounding Authority shall issue order specifying the provisions of the Act or of the rules, directions, requisitions or orders made there under in respect of which contravention has taken place along with details of the alleged contraventions. SECTION-1 Report by the Indian company receiving amoun .....

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nt 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 under Automatic Route or Approval Route If Approval Route, give details (ref. no. of approval and date) Automatic Route / Approval Route 6 Name o .....

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estor (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., Social Security No, or any Unique No. certifying the bonafides of the remitter as prevalent in the remitter s country We confirm that all the information furnished above is true and ac .....

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ling-in the Return (Respondents are encouraged to submit the e-form of this return,which can be downloaded from the FEMA Forms section under the Forms category on the RBI website, www.rbi.org.in)The e-form is easy-to-fill with user guidance and consistency checks. The duly filled-in e-form should be emailed to fla@rbi.org.in. Section I (Identification Particulars) 1.Name and Address of the Indian Company: Name of the Company: _______________________________ Address: _____________________________ .....

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the last financial year(April-March)(Y/N)? If yes,please specify the Company's old Name Company's old Name: _______ Effective Date(DD/MM/YYYY) 8. WhethertheCompanyis listed(Y/N)? If yes, please furnish the share price on closing date of reference period Face Value (Per Share) Market Value (Per Share) Latest March Previous March Latest March Ordinary/Equity Share 9. Identification of the reporting Company(intermsofinwardFDI) (a)Subsidiary of Foreign entity (b)Associate of foreign entity ( .....

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ent from Account Closing Period,then information should be given on internal assessment basis for the reference period Block1A:Total Paid-up Capital of Indian Company: Item End-of Previous March End-of Latest March Number of Shares in actual Amount in Rs lakh Number of Shares in actual Amount in Rs lakh 1.0TotalPaid-upCapital (=1.1+ 1.2) 1.1TotalEquity&Participating Preference Share capital (=1.1(a)+ 1.1(b)) (a)Ordinary/Equity Share* (b) Participating Preference Share 1.2 Non-participating P .....

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Non Resident Equity & Participating Preference share capital% Note*In case of different class of Equity Share (class A, class B etc.),consolidated figure should be reported. #Non-participating Preference Share do not have following rights. (a) to receive dividend, out of surplus profit after paying the dividend to equity shareholders. (b) to have share in surplus assets remaining after the entire capital is paid in case of winding up of the company. Block 1B : Profit and Loss Account(from P .....

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ce 4.3 Reserve and Surplus (=4.1+ 4.2) 4.4 Net worth of Company(= 1.1+ 4.3) Block1D: Sales and Purchase made during the reference year Note: To be filled in by company where single foreign direct investor holding is more than 50% in total equity(i.e. If reporting Indian company is subsidiary of Foreign company). Item Amountin Rs lakh (During the year) Previous Year Latest Year 5.1 Domestic Sales 5.2 Exports 5.3 Total Sales(= 5.1+5.2) 5.4 Domestic purchase 5.5 Imports 5.6 Total Purchase(= 5.4 +5. .....

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alue(OFBV) Method should be used for equity valuation. Block-2A: Investment in India under Foreign Direct Investment(FDI) scheme(10%or more Equity Participation). [Please furnish here the outstanding investments made under the FDI Scheme in India by Non-resident Direct investors, who were individually holding 10 percent or more ordinary/equity & preference shares of your company on the reference date] Name of thenon- resident Company/ Individual Type of Capital Country of non-resident invest .....

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f Block-2A includes all other liabilities and claims at Nominal value,except equity and participating preference shares,(i.e.trade credit,loan,debentures, Non-participating share capital,other accounts receivable and payables etc.)of Indian reporting company with its director investor indicated inBlock-2A. Block2B: Investment in India under Foreign Direct Investment(FDI)scheme(Less than 10% Equity Holding) [Please furnish here the outstanding investments made under the FDI Scheme in India by Non .....

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t Investor 1.2 Claims on Direct Investor (Reverse investment) 2.0 Other Capital(= 2.1-2.2)# 2.1 Liabilities to Direct Investor 2.2 Claims on Direct Investor Note: (i)If the information is to be furnished for more than one country, then add separate Block-2Bwith same format. (ii) #:Other capital,item2.1&2.2 of Block-2Bincludes all other liabilities and claims at Nominal value, except equity and participating preference shares,(i.e. trade credit, loan, debentures, Non-participating share capit .....

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end of latest year(%) Amount in Rs lakh as at the end of Previous March Latest March 1.0 Equity Securities (at Market Value) 2.0 Debt Securities (=2.1+2.2) 2.1 Money Market Instruments (original maturity upto1year) 2.2 Bonds and Other instruments (original maturity more than 1 year) Please ensure that Non-resident Equity & Participating Preference share capital mentioned at item 2.1 of block1(A) should be reported in either Block-2A or Block-2B or Block-2C at Market Value i.e. sum of equity% .....

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Fund of Book Value(OFBV) Method should be used for valuation of equity investment (Item 1.1 of Block 4A & 4B and Item 1.1 of Block 5). Block-3: Equity Capital (PUC), Reserves & Surplus of Direct Investment Enterprise(DIE) Abroad(10%or more equity holding by Indian Reporting company) [Please report here the total equity of DIE, equity held by your company, reserves (excluding P&L Account) and P&L Account of those DIEs in each of which your company hold 10% or more equity shares on .....

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should be given as on closing date of reference period. Block-4:Direct Investment Abroad under Overseas Direct Investment(ODI)Scheme Block-4A:Direct Investment Abroad (10%or more equity holding) Please furnish here the market value of outstanding investments in DIE, made by your company under the ODI Scheme,in each of which your company hold10%or more equity shares on the reference date. Name of the non-resident DIE Country of Type of Capital non-resident DIE Equity holding per Cent as at the en .....

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r capital, item 2.1& 2.2 of Block-4A includes all other liabilities and claims at Nominal value, except equity shares, (i.e. trade credit, loan, debentures, Non-participating share capital, other accounts receivable and payables etc.)of Indian reporting company with its DIEreportedinBlock-4A. Block-4B:Direct Investment Abroad(Less than 10% equity holding) Please furnish here the market value of outstanding investments in DIE,made by your company under the ODI Scheme, in each of which your co .....

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Note: (i) If the information is to be furnish form other than one country, then use the ADD Block 4B with the same format. (ii)#:Other capital, item 2.1 & 2.2 of Block-4B includes all other liabilities and claims at Nominal value, except equity, (i.e. trade credit, loan, debentures, Non-participating share capital, other accounts receivable and payables etc.) of Indian reporting company with non-resident companies where Indian company holds lessthan10percentequityandalso with related partie .....

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Note: (i) Country wise consolidated information pertaining to each type of investment should be reported separately. (ii) If the information is to be furnish for more than one country, then use the ADD Block 5 with the same format. Section IV-A Outward Foreign Affiliates Trade Statistics (Outward FATS) Please provide the amount in foreign currency (in actual) in all blocks of Section IV-A Block-3B: Imports, Exports, Total Sales and Total Purchase of Direct Investment Enterprise (DIE) Abroad (mo .....

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claims not considered as direct investment or portfolio investment. Other Investment Outstanding Liabilities with foreign unrelated party Outstanding claims on foreign unrelated party Amounting Rs lakh as at the end of Previous Latest March Previous Latest 6.1 Trade Credit 6.2 Loans 6.3 Currency & Deposits 6.4 Other receivable and payable accounts [e-Form version of this Return is available on the FEMA Forms section under the Forms categoryontheRBIwebsite(www.rbi.org.in).SystemRequirement:MS .....

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e of shares / compulsorily and mandatorily convertible preference shares / debentures / others 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 shareholding pattern of the investee company after the acquisition of shares by a person resident outside India. iii. Certificate indicating fair value of shares from a Chartered Accountant. iv. Copy of Broker's note if sale .....

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atorily convertible preference shares / debentures / others by a person resident outside India vii. If the sellers are NRIs/OCBs, the copies of RBI approvals, if applicable, evidencing the shares held by them on repatriation/non-repatriation basis. viii. No Objection/Tax Clearance Certificate from Income Tax Authority/ Chartered Account. 1 Name of the company Address (including e-mail , telephone Number, Fax no) Activity NIC Code No. 2 Whether FDI is allowed under Automatic route Sectoral Cap un .....

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ion Address of the buyer (including e-mail, telephone number. Fax no.) 5 Name of the seller Constitution / Nature of the disinvesting 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 (SWF*) 9. Partnership/ Proprietorship firm 10. Financial Institution 11. NRIs/PIOs 12. Othersi Date and Place of Incorporation Address of the seller (including e-mail, telephone Number Fax no) 6 Particulars of .....

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nsfer After the transfer 9. Where the shares / CMCPS / debentures / others are listed on Stock Exchange Name of the Stock Exchange Price Quoted on the Stock exchange Where the shares / CMCPS / debentures / others are Unlisted Price as per Valuation guidelines* Price as per Chartered Accountants * / ** Valuation report (CA Certificate to be attached) Declaration by the transferor / transferee I / We hereby declare that i. The particulars given above are true and correct to the best of my/our know .....

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ntures /others of a company engaged in financial services sector or a sector where general permission is not available. 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 / compulsorily and mandatorily convertible debentures/ others from resident to non resident the declaration has to be sig .....

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change assets, and which manages those assets separately from the official reserves of monetary authorities. ## The initial investment/s was/were made by FVCI under FDI Scheme in terms of Schedule 1 to Notification No. FEMA.20/2000-RB dated May 3, 2000. Certificate by the AD 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 Date : Name of the AD Branch AD .....

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the remitter as prevalent in the remitter s country. We confirm that all the information furnished above is true and accurate as provided by the overseas remitting bank of the non-resident investor. (Signature of the Authorised Official of the AD bank receiving the remittance) Date: Place: Stamp : Proforma Statement of inflows/outflows on account of remittance received/made in connection with transfer of shares / compulsorily and mandatorily convertible preference shares / debentures/others/othe .....

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(6) (7) (8) (9) (10) (11) (12) Outflow - Transfer from non-resident to resident [Amount in Rs.] Date of Transaction Name of the Company Activity NIC Code Name of the Seller Constitution Nature of Business of the Seller Name of the Buyer Constitution Nature of Business of the Buyer Name of Shares transferred Face value Sale Price per share Total inflow (1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11) (12) SECTION-5 Form DRR Return to be filed by the Domestic Custodian who has arranged issue/transfer .....

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sponsored or unsponsored 7. If sponsored, name and address of the sponsorer. 8. Name and address of the Lead Manager/ Investment/Merchant Banker 9. Name and address of the Sub-Managers to the issue 10. Details of FIPB approval (If foreign investment in the company is subject to FIPB approval) 11. Whether any overall sectoral cap for foreign investment is applicable. If yes, please give details. 1 If the issue of DR increases the equity capital of the Before Issue After Issue 2 company or is spo .....

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paid-up capital d Details of repatriation/utilisation of the proceeds 13. Number of DRs issued 14. Ratio of DRs to underlying securities 15. Whether funds are kept abroad. If yes, name and address of the bank 16. Whether the DR is listed/traded on an International Exchange or trading platform. If so, details of the exchange/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 Governmen .....

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FI) in companies engaged in all the aforestated services will be subject to relevant regulations and such terms and conditions, as may be specified from time to time, by the Ministry of Information and Broadcasting. 1.2 The foreign investment (FI) limit in companies engaged in the aforestated activities shall include, in addition to FDI, investment by Foreign Institutional Investors (FIIs), Foreign Portfolio Investors (FPIs), Qualified Foreign Investors(QFIs), Non-Resident Indians (NRIs), Foreig .....

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harge of technical network operations and 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 s .....

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ry of Information and Broadcasting shall 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, opera .....

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sion holder/licensee or foreign personnel being denied 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 o .....

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person/place outside India unless permitted 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 repres .....

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ative to carry out the inspection. The company 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 .....

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

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five years. (xix)The company shall not import or utilize any equipment, which are identified as unlawful and/or render network security vulnerable. Other Conditions (xx)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. (xxi)Licensee will ensure that broadcasting service installation carried out by it should not become a safety hazard a .....

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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 facility, telecom network, generation and distribution of power, air conditioning. (iii) Common Facilities refer to the facilities available for all the units located in the industrial park, and include facilities of power, roads (including approach roads), railway line/sidings including electrified r .....

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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 built up space utilized for providing common facilities. (c) in the case of a combination of developed land and built-up space- the net site and floor area available for allocation to the units excluding the site area and built up space utilized for providing common facilities. (v) Industrial Activity m .....

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uld not be subject to the conditionalities applicable for construction development projects etc. spelt out in para 5.2.10 of Chapter 5 of this Circular, provided the Industrial Parks meet with the under-mentioned conditions: (i) it would comprise of a minimum of 10 units and no single unit shall occupy more than 50% of the allocable area; (ii) the minimum percentage of the area to be allocated for industrial activity shall not be less than 66% of the total allocable area. Annexure-9 Permissible .....

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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 its General Body. (a) In the case of NRIs, as hitherto, individual holding is restricted to 5 per cent of the total paid-up capital both on repatriation and non-repatriation basis and aggregate limit cannot exceed 10 per cent of the total paid-up capital both on repatriation and non-repatriation basis. However, NRI holding can be allowed up to 24 per cent .....

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gn shareholding applicable for the insurance sector is not being breached. (c) Transfer of shares under FDI from residents to non-residents will continue to require approval of RBI and Government as per para 3.4.2 above as applicable. (d) The policies and procedures prescribed from time to time by RBI and other institutions such as SEBI, Minsitry of Corporate Affairs and IRDAI on these matters will continue to apply. (e) RBI guidelines relating to acquisition by purchase or otherwise of shares o .....

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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 channels viz., (i) branches (ii) a wholly-owned subsidiary and (iii) a subsidiary with aggregate foreign investment up to a maximum of 74 per cent in a private bank. (d) A foreign bank will be permitted to establish a wholly-owned subsidiary either through conversion of existing branches into a subsidiary or through a fresh banking license. A foreign bank wi .....

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