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Department of Industrial Policy and Promotion Ministry of Commerce and Industry Government of India

Consolidated FDI Policy


(Effective from April 17, !1"#

Government of India Ministry of Commerce $ Industry Department of Industrial Policy $ Promotion (FC %ection#

Circular 1 of !1"
%u&'ect( Consolidated FDI Policy) The Consolidated FDI Policy is attached. 2. This circular will take effect from A ril 1!" 2#1$.

%An&ali Prasad' Additional (ecretary to the )o*ernment of India D+o IPP F. ,o. -%1'+2#1$.FC.I Dated the 1!.#$.2#1$ Co y forwarded to/ 1. 2. 5. $. -. Press Information 0fficer" Press Information 1ureau. for 2i*in2 wide u3licity to the a3o*e circular. ,IC" DIPP for u loadin2 the circular on DIPP4s we3site. De artment of 6conomic Affairs" 7inistry of Finance" ,ew Delhi. 8eser*e 1ank of India" 7um3ai. 9indi (ection for 9indi Translation.

Inde* Description C,apter-1 Intent and .&'ective


1.1 Intent and 03&ecti*e

Pa+e
/ 0 : 1 12 1$ 1: 1= 2: 2= 5# 5# 5# 51 11 55

C,apter-

Definitions

2.1 Definitions

C,apter-1 General Conditions on FDI


5.1 ;ho Can In*est in India< 5.2. 6ntities into which FDI can 3e made 5.5 Ty es of Instruments 5.$ Issue+Transfer of (hares 5.- ( ecific Conditions in Certain Cases 5.: 6ntry 8outes for In*estment 5.! Ca s on In*estments 5.> 6ntry Conditions on In*estment 5.= 0ther Conditions on In*estment 1esides 6ntry Conditions 5.1# Forei2n In*estment into+downstream In*estment 3y Indian Com anies

C,apter-" Calculation of Forei+n Investment


$.1 Total Forei2n In*estment i.e. Direct and Indirect Forei2n In*estment in Indian Com anies

C,apter-/ Forei+n Investment Promotion 2oard (FIP2#


-.1 Constitution of FIP1 -.2 ?e*els of A ro*als for Cases under )o*ernment 8oute ro*al ro*al -.5 Cases ;hich do not 8e@uire Fresh A

17 5! 5! 5! 5> 13 5= 5=

-.$ 0nline Filin2 of A lications for FIP1+)o*ernmentAs A

C,apter-0 %ector %pecific Conditions on FDI


:.1 Prohi3ited (ectors :.2 Permitted (ectors

A+riculture
:.2.1 A2riculture B Animal 9us3andry :.2.2 Tea Plantation

"! $# $2 " $2 $$ "/ $$"5 "5 $> -5 -$ -! -! -= :# :# :# :1 07 07 :! :> !# !# !1 !2 !2 !5

Minin+ and Petroleum $ 4atural Gas


:.2.5 7inin2 :.2.$ Petroleum B ,atural )as

Manufacturin+
:.2.- 7anufacture of items reser*ed for roduction in 7icro and (mall 6nter rises %7(6s' :.2.: Defence

%ervices %ector
Information %ervices :.2.! :.2.> :.2.= 1roadcastin2 Print 7edia Ci*il A*iation

:.2.1# Courier (er*ices :.2.11 Construction De*elo ment/ Townshi s" 9ousin2" 1uilt.u infrastructure :.2.12 Industrial Parks. new and eCistin2 :.2.15 (atellites. esta3lishment and o eration :.2.1$ Pri*ate (ecurity A2encies :.2.1- Telecom (er*ices :.2.1: Tradin2

Financial %ervices
0) )17 Financial %ervices :.2.1!.1 Asset 8econstruction Com anies :.2.1!.2 1ankin2. Pri*ate (ector :.2.1!.5 1ankin2. Pu3lic (ector :.2.1!.$ Commodity 6Cchan2es :.2.1!.- Credit Information Com anies %CIC' :.2.1!.: Infrastructure Com any in the (ecurities 7arket :.2.1!.! Insurance :.2.1!.> ,on.1ankin2 Finance Com anies %,1FC'

.t,ers :.2.1> Pharmaceuticals :.2.1= Power 6Cchan2es

7/ !!77 !! !> >#

C,apter-7 6emittance, 6eportin+ and 7iolation


!.1 8emittance and 8e atriation !.2 8e ortin2 of FDI !.5 Adherence to )uidelines+0rders and Conse@uences of Hiolation Anne*ures AnneC.1 Form FC.)P8 AnneC.2 Terms and conditions for transfer of ca ital instruments from resident to non. =1 resident and *ice.*ersa AnneC.5 Documents to 3e su3mitted 3y a erson resident in India for transfer of shares to a erson resident outside India 3y way of 2ift AnneC.$ Definition of Irelati*eI as 2i*en in (ection : of Com anies Act" 1=-: AnneC.- 8e ort 3y the Indian com any recei*in2 amount of consideration for issue of =! shares+con*erti3le de3entures under the FDI scheme AnneC.: Dnow Eour Customer %DEC' Form in res ect of the non.resident in*estor AnneC.! Form Annual 8eturn on Forei2n ?ia3ilities and Assets AnneC.> Form FC.T8( AnneC.= Form D8 AnneC.1# Form D8 . Fuarterly AnneC.11 G,o ,on.Com ete ClauseA Certificate

>5

==:

== 1## 1#> 1111! 11>

C,apter 1( Intent and .&'ective


1)1 1.1.1 Intent and .&'ective It is the intent and o3&ecti*e of the )o*ernment of India to attract and romote forei2n direct in*estment in order to su lement domestic ca ital" technolo2y and skills" for accelerated economic 2rowth. Forei2n Direct In*estment" as distin2uished from ortfolio in*estment" has the connotation of esta3lishin2 a Glastin2 interestA in an enter rise that is resident in an economy other than that of the in*estor. 1.1.2 The )o*ernment has ut in lace a olicy framework on Forei2n Direct In*estment" which is trans arent" year" to ca ture and kee redicta3le and easily com rehensi3le. This framework is ace with the re2ulatory chan2es" effected in the interre2num. em3odied in the Circular on Consolidated FDI Policy" which may 3e u dated e*ery The De artment of Industrial Policy and Promotion %DIPP'" 7inistry of Commerce B Industry" )o*ernment of India makes olicy ronouncements on FDI throu2h Press ,otes+Press 8eleases which are notified 3y the 8eser*e 1ank of India as amendments to the Forei2n 6Cchan2e 7ana2ement %Transfer or Issue of (ecurity 3y Persons 8esident 0utside India' 8e2ulations" 2### %notification ,o.F67A 2#+2###.81 dated 7ay 5" 2###'. These notifications take effect from the date of issue of Press ,otes+ Press 8eleases" unless s ecified otherwise therein. In case of any conflict" the rele*ant F67A ,otification will re*ail. The rocedural instructions are issued 3y the 8eser*e 1ank of India *ide A.P. %DI8 (eries' Circulars. The re2ulatory framework" o*er a eriod of time" thus" consists of Acts" 8e2ulations" Press ,otes" Press 8eleases" Clarifications" etc. 1.1.5 The resent consolidation su3sumes and su ersedes all Press ,otes+Press 8eleases+Clarifications+Circulars issued 3y DIPP" which were in force as on A ril 1:" 2#1$ and reflects the FDI Policy as on A ril 1!" 2#1$. This Circular accordin2ly will take effect from A ril 1!" 2#1$ and will remain in force until su erseded in totality or in 1.1.$ art thereof. 8eference to any statute or le2islation made in this Circular shall the or rescission taken under of the earlier rescinded Press Press ,otes+Press ,otes+Press include modifications" amendments or re.enactments thereof. ,otwithstandin2 ha*e 3een done 8eleases+Clarifications+Circulars" anythin2 done or any action taken or ur orted to 8eleases+Clarifications+Circulars rior to A ril 1!" 2#1$" shall" in so far as it is not inconsistent with those Press ,otes+Press 8eleases+Clarifications+Circulars" 3e deemed to ha*e 3een done or taken under the corres ondin2 ro*isions of this circular and shall 3e *alid and effecti*e. -

C,apter ( Definitions
)1 )1)1 Definitions 8AD Cate+ory-I 2an9: means a 3ank %(cheduled Commercial" (tate or Jr3an Coo erati*e' which is authoriKed under (ection 1#%1' of F67A to undertake all current and ca ital account transactions accordin2 to the directions issued 3y the 81I from time to time. )1) 8Aut,ori;ed 2an9: means a 3ank includin2 a co.o erati*e 3ank %other than an authoriKed dealer' authoriKed 3y the 8eser*e 1ank to maintain an account of a erson resident outside India. )1)1 )1)" 8Aut,ori;ed Dealer: means a erson authoriKed as an authoriKed dealer under su3.section %1' of section 1# of F67A. 8Aut,ori;ed Person: means an authoriKed dealer" money chan2er" offshore 3ankin2 unit or any other erson for the time 3ein2 authoriKed under su3. section %a' of section 1# of F67A to deal in forei2n eCchan2e or forei2n securities. )1)/ 8Capital: means e@uity sharesL fully" com ulsorily B mandatorily con*erti3le reference sharesL fully" com ulsorily B mandatorily con*erti3le de3entures. ,ote/ ;arrants and artly aid shares can 3e issued to erson+%s' resident ro*al throu2h the )o*ernment route .
1

outside India only after a )1)0

8Capital account transaction: means a transaction which alters the assets or lia3ilities" includin2 contin2ent lia3ilities" outside India of ersons resident in India or assets or lia3ilities in India of ersons resident outside India" and includes transactions referred to in su3.section %5' of section : of F67A.

)1)7

8Control: shall include the ri2ht to a oint a ma&ority of the directors or to control the mana2ement or a2reements. olicy decisions includin2 3y *irtue of their shareholdin2 or mana2ement ri2hts or shareholders a2reements or *otin2

)1)5

8Depository 6eceipt: %D8' means a ne2otia3le security issued outside India 3y a De ository 3ank" on 3ehalf of an Indian com any" which re resent the local 8u ee denominated e@uity shares of the com any held as de osit 3y a Custodian 3ank in India. D8s are traded on (tock 6Cchan2es in the J(" (in2a ore" ?uCem3our2" etc. D8s listed and traded in the J( markets are known as American De ository 8ecei ts %AD8s' and those listed and traded

8e*iew of FDI olicy to include warrants and artly. aid shares is under consideration of the )o*ernment.

anywhere+elsewhere are known as )lo3al De ository 8ecei ts %)D8s'. )1)3 8Erst<,ile .verseas Corporate 2ody: %0C1' means a com any" artnershi firm" society and other cor orate 3ody owned directly or indirectly to the eCtent of at least siCty ercent 3y non.resident Indians and includes o*erseas trust in which not less than siCty ercent 3eneficial interest is held 3y non.resident Indians directly or indirectly 3ut irre*oca3ly and which was in eCistence on the date of commencement of the Forei2n 6Cchan2e 7ana2ement %;ithdrawal of )eneral Permission to 0*erseas Cor orate 1odies %0C1s' ' 8e2ulations" 2##5 %the 8e2ulations' and immediately rior to such commencement was eli2i3le to undertake transactions ursuant to the 2eneral ermission 2ranted under the 8e2ulations. )1)1! 8Forei+n Currency Converti&le 2ond: %FCC1' means a 3ond issued 3y an Indian com any eC ressed in forei2n currency" the rinci al and interest of which is aya3le in forei2n currency. FCC1s are issued in accordance with the Forei2n Currency Con*erti3le 1onds and ordinary shares %throu2h de ository recei t mechanism' (cheme" 1==5 and su3scri3ed 3y a non.resident entity in forei2n currency and con*erti3le into ordinary shares of the issuin2 com any in any manner" either in whole" or in art. )1)11 8FDI: means in*estment 3y non.resident entity+ erson resident outside India in the ca ital of an Indian com any under (chedule 1 of Forei2n 6Cchan2e 7ana2ement %Transfer or Issue of (ecurity 3y a Person 8esident 0utside India' 8e2ulations" amendment 2### %0ri2inal notification are is a*aila3le at at htt /++r3i.or2.in+(cri ts+1(MFema,otifications.as C<IdN1!$ notifications a*aila3le htt /++r3i.or2.in+(cri ts+1(MFema,otifications.as C'. )1)1 )1)11 )1)1" 8FEMA: means the Forei2n 6Cchan2e 7ana2ement Act" 1=== %$2 of 1===' %htt /++finmin.nic.in+law+indeC.as '. 8FIP2: means the Forei2n In*estment Promotion 1oard constituted 3y the )o*ernment of India. 8Forei+n Institutional Investor:%FII' means an entity esta3lished or incor orated outside India which ro oses to make in*estment in India and which is re2istered as a FII in accordance with the (ecurities and 6Cchan2e 1oard of India %(61I' %Forei2n Institutional In*estor' 8e2ulations 1==-. (u3se@uent

)1)1/

8Forei+n Portfolio Investor:%FPI' means a erson re2istered in accordance with the ro*isions of (ecurities and 6Cchan2e 1oard of India %(61I' %Forei2n Portfolio In*estors' 8e2ulations" 2#1$" as amended from time to time. 8Forei+n 7enture Capital Investor: %FHCI' means an in*estor incor orated and esta3lished outside India" which is re2istered under the (ecurities and 6Cchan2e 1oard of India %Forei2n Henture Ca ital In*estor' 8e2ulations" 2### O(61I%FHCI' 8e2ulationsP and ro oses to make in*estment in accordance with these 8e2ulations. 8Government route: means that in*estment in the ca ital of resident entities 3y non.resident entities can 3e made only with the rior a ro*al of )o*ernment %FIP1" De artment of 6conomic Affairs %D6A'" 7inistry of Finance or De artment of Industrial Policy B Promotion" as the case may 3e'. 8Group Company: means two or more enter rises which" directly or indirectly" are in a osition to/ %i' eCercise twenty.siC ercent or more of *otin2 ri2hts in other enter riseL or %ii' a oint more than fifty ercent of mem3ers of 3oard of directors in the other enter rise.

)1)10

)1)17

)1)15

)1)13 )1) ! )1) 1

8=oldin+ Company: would ha*e the same meanin2 as defined in Com anies Act" 1=-:. 8Indian Company: means a com any incor orated in India under the Com anies Act" 1=-:. 8Indian 7enture Capital >nderta9in+: %IHCJ' means an Indian com any/ %i' whose shares are not listed in a reco2nised stock eCchan2e in IndiaL %ii' which is en2a2ed in the 3usiness of ro*idin2 ser*ices" roduction or manufacture of articles or thin2s" 3ut does not include such acti*ities or sectors which are s ecified in the ne2ati*e list 3y the (61I" with a ro*al of Central )o*ernment" 3y notification in the 0fficial )aKette in this 3ehalf.

)1)

8Investin+ Company: means an Indian Com any holdin2 only in*estments in other Indian com any+%ies'" directly or indirectly" other than for tradin2 of such holdin2s+securities.

For details lease refer to (61I %FPI' 8e2ulations" 2#1$ and the Forei2n 6Cchan2e 7ana2ement %Transfer or Issue of (ecurity 3y a Person 8esident outside India' %(econd Amendment' 8e2ulations" 2#1$ notified *ide ,otification ,o. F67A.2=!+2#1$. 81 dated 7arch 15" 2#1$ and A.P. %DI8 (eries' Circular ,o.112 dated 7arch 2-" 2#1$. ;here*er the words or acronyms FPI" FII or FFI occur in this document" the meanin2 and im lications must 3e accordin2 to the a3o*e 8e2ulations+,otifications" articularly durin2 the transition eriod as rescri3ed in these 8e2ulations.

)1) 1

8Investment on repatria&le &asis: means in*estment" the sale roceeds of which" net of taCes" are eli2i3le to 3e re atriated out of India and the eC ression Gin*estment on non.re atria3le 3asisA shall 3e construed accordin2ly. 8?oint 7enture: %QH' means an Indian entity incor orated in accordance with the laws and re2ulations in India in whose ca ital a non.resident entity makes an in*estment.

)1) "

)1) / )1) 0 )1) 7 )1) 5

8@imited @ia&ility Partners,ip: means a ?imited ?ia3ility Partnershi firm" formed and re2istered under the ?imited ?ia3ility Partnershi Act" 2##>. 84on-resident entity: means a G erson resident outside IndiaA as defined under F67A. 84on-6esident Indian: %,8I' means an indi*idual resident outside India who is a citiKen of India or is a erson of Indian ori2in. A com any is considered as A.<ned: 3y resident Indian citiKens if more than -#R of the ca ital in it is 3eneficially owned 3y resident Indian citiKens and + or Indian com anies" which are ultimately owned and controlled 3y resident Indian citiKensL 8Person: includes. %i' an indi*idual" %ii' a 9indu undi*ided family" %iii' a com any" %i*' a firm" %*' an association of ersons or a 3ody of indi*iduals whether incor orated or not" %*i' e*ery artificial &uridical erson" not fallin2 within any of the recedin2 su3.clauses" and %*ii' any a2ency" office" or 3ranch owned or controlled 3y such erson. 8Person of Indian .ri+in: %PI0' means a citiKen of any country other than 1an2ladesh or Pakistan" if %i' %ii' he at any time held Indian Pass ortL or he or either of his arents or any of his 2rand arents was a citiKen of India 3y *irtue of the Constitution of India or the CitiKenshi Act" 1=-%-! of 1=--'L or %iii' the erson is a s ouse of an Indian citiKen or a erson referred to in su3. clause %i' or %ii'.

)1) 3

)1)1!

)1)11

8Person resident in India: means. %i' a erson residin2 in India for more than one hundred and ei2hty.two days durin2 the course of the recedin2 financial year 3ut does not include. %A' A erson who has 2one out of India or who stays outside India" in either case. %a' for or on takin2 u em loyment outside India" or %3' for carryin2 on outside India a 3usiness or *ocation outside India" or %c' for any other ur ose" in such circumstances as would indicate his intention to stay outside India for an uncertain eriodL %1' A erson who has come to or stays in India" in either case" otherwise than. %a' for or on takin2 u em loyment in IndiaL or %3' for carryin2 on in India a 3usiness or *ocation in India" or %c' for any other ur ose" in such circumstances as would indicate his intention to stay in India for an uncertain eriodL %ii' any erson or 3ody cor orate re2istered or incor orated in India" %iii' an office" 3ranch or a2ency in India owned or controlled 3y a erson resident outside India" %i*'an office" 3ranch or a2ency outside India owned or controlled 3y a erson resident in India. 8Person resident outside India: means a erson who is not a Person resident in India. 8Portfolio Investment %c,eme: means the Portfolio In*estment (cheme referred to in (chedules 2" 2A B 5 of F67A %Transfer or Issue of (ecurity 3y a Person 8esident 0utside India' 8e2ulations" 2###.

)1)1 )1)11

)1)1"

8A Bualified Forei+n Investor: %FFI' means a non.resident in*estor %other than (61I re2istered FII and (61I re2istered FHCI' who meets the DEC re@uirements of (61I for the ur ose of makin2 in*estments in accordance with the re2ulations+orders+circulars of 81I+(61I. 862I: means the 8eser*e 1ank of India esta3lished under the 8eser*e 1ank of India Act" 1=5$. 86esident Entity: means GPerson resident in IndiaA eCcludin2 an indi*idual. 86esident Indian Citi;en: shall 3e inter reted in line with the definition of

)1)1/ )1)10 )1)17

G erson resident in IndiaA as er F67A" 1===" read in con&unction with the Indian CitiKenshi Act" 1=--. )1)15 )1)13 )1)"! )1)"1 8%E2I: means the (ecurities and 6Cchan2e 1oard of India esta3lished under the (ecurities and 6Cchan2e 1oard of India Act" 1==2. 8%EC: means a ( ecial 6conomic Sone as defined in ( ecial 6conomic Sone Act" 2##-. 8%IA: means (ecretariat of Industrial Assistance in DIPP" 7inistry of Commerce B Industry" )o*ernment of India. 8Dransfera&le Development 6i+,ts: %TD8' means certificates issued in res ect of cate2ory of land ac@uired for u3lic ur oses either 3y the Central or (tate )o*ernment in consideration of surrender of land 3y the owner without monetary com ensation" which are transfera3le in art or whole. )1)" 87enture Capital Fund: %HCF' means a Fund esta3lished in the form of a trust" a com any includin2 a 3ody cor orate and re2istered under (ecurities and 6Cchan2e 1oard of India %Henture Ca ital Fund' 8e2ulations" 1==:" which %i' has a dedicated ool of ca italL %ii' raised in the manner s ecified under the 8e2ulationsL and %iii' in*ests in accordance with the 8e2ulations.

C,apter 1( General Conditions on FDI


1)1 E,o Can Invest in IndiaF sectors+acti*ities which are rohi3ited. 9owe*er" a citiKen of 1an2ladesh or an entity incor orated in 1an2ladesh can in*est only under the )o*ernment route. Further" a citiKen of Pakistan or an entity incor orated in Pakistan can in*est" only under the )o*ernment route" in sectors+acti*ities other than defence" s ace and atomic ener2y and sectors+acti*ities rohi3ited for forei2n in*estment. 5.1.2 ,8Is resident in ,e al and 1hutan as well as citiKens of ,e al and 1hutan are ermitted to in*est in the ca ital of Indian com anies on re atriation 3asis" su3&ect to the condition that the amount of consideration for such in*estment shall 3e aid only 3y way of inward remittance in free forei2n eCchan2e throu2h normal 3ankin2 channels. 5.1.5 0C1s ha*e 3een dereco2niKed as a class of in*estors in India with effect from (e tem3er 1:" 2##5. 6rstwhile 0C1s which are incor orated outside India and are not under the ad*erse notice of 81I can make fresh in*estments under FDI Policy as incor orated non. resident entities" with the rior a ro*al of )o*ernment of India if the in*estment is throu2h )o*ernment routeL and with the throu2h Automatic route. 5.1.$ %i' An FII+FPI may in*est in the ca ital of an Indian com any under the Portfolio In*estment (cheme which limits the indi*idual holdin2 of an FII+FPI 3elow 1#R of the ca ital of the com any and the a22re2ate limit for FII+FPI+FFI in*estment to 2$R of the ca ital of the com any. This a22re2ate limit of 2$R can 3e increased to the sectoral ca +statutory ceilin2" as a lica3le" 3y the Indian com any concerned throu2h a resolution 3y its 1oard of Directors followed 3y a s ecial resolution to that effect 3y its )eneral 1ody and su3&ect to ca s. %ii' An Indian com any which has issued shares to FIIs+FPIs under the FDI Policy for which the ayment has 3een recei*ed directly into com anyAs account should re ort these fi2ures se arately under item no. - of Form FC.)P8 (Anne*-1#. %iii' A daily statement in res ect of all transactions %eCce t deri*ati*e trade' has to 3e su3mitted 3y the custodian 3ank in flo 81I and also u loaded y+soft co y in the rescri3ed format directly to directly on the 0F8( we3 site rior intimation to 81I. The a22re2ate FII+FPI+FFI in*estment" in the FDI and Portfolio In*estment (cheme" should 3e within the a3o*e rior a ro*al of 81I if the in*estment is 5.1.1 A non.resident entity can in*est in India" su3&ect to the FDI Policy eCce t in those

%htt s/++secwe3.r3i.or2.in+08F(7ain;e3+?o2in.&s '.

5.1.-

0nly re2istered FIIs+FPIs and ,8Is as er (chedules 2" 2A and 5 res ecti*ely of Forei2n 6Cchan2e 7ana2ement %Transfer or Issue of (ecurity 3y a Person 8esident 0utside India' 8e2ulations" 2###" can in*est+trade throu2h a re2istered 3roker in the ca ital of Indian Com anies on reco2nised Indian (tock 6Cchan2es.

5.1.:

A (61I re2istered Forei2n Henture Ca ital In*estor %FHCI' may contri3ute u to 1##R of the ca ital of an Indian Henture Ca ital Jndertakin2 %IHCJ' and may also set u a domestic asset mana2ement com any to mana2e the fund. All such in*estments can 3e made under the automatic route in terms of (chedule : to ,otification ,o. F67A 2#. A (61I re2istered FHCI can in*est in a domestic *enture ca ital fund re2istered under the (61I %Henture Ca ital Fund' 8e2ulations" 1==:. (uch in*estments would also 3e su3&ect to the eCtant F67A re2ulations and eCtant FDI olicy includin2 sectoral ca s" etc. (61I re2istered FHCIs are also allowed to in*est under the FDI (cheme" as non.resident entities" in other com anies" su3&ect to FDI Policy and F67A re2ulations. Further" FHCIs are allowed to in*est in the eli2i3le securities %e@uity" e@uity linked instruments" de3t" de3t instruments" de3entures of an IHCJ or HCF" units of schemes+funds set u 3y a HCF' 3y way of ri*ate arran2ement+ urchase from a third arty also" su3&ect to terms and conditions as sti ulated in (chedule : of ,otification ,o. F67A 2# + 2### .81 dated 7ay 5" 2### as amended from time to time. It is also 3ein2 clarified that (61I re2istered FHCIs would also 3e allowed to in*est in securities on a reco2niKed stock eCchan2e su3&ect to the sti ulated therein. ro*isions of the (61I %FHCI' 8e2ulations" 2###" as amended from time to time" as well as the terms and conditions

5.1.!

Bualified Forei+n Investors (BFls# investment in eGuity s,ares( only in e@uity shares of listed Indian com anies throu2h reco2niKed 3rokers on reco2niKed stock eCchan2es in India as well as in e@uity shares of Indian com anies which are offered to u3lic in India in terms of the rele*ant and a lica3le (61I 2uidelines+re2ulations. FFls are also ermitted to ac@uire e@uity shares 3y way of ri2ht shares" 3onus shares or e@uity shares on account of stock s lit+consolidation or e@uity shares on account of amal2amation" demer2er or such cor orate actions su3&ect to the rescri3ed in*estment limits. FFIs are allowed to sell the e@uity shares so ac@uired su3&ect to the rele*ant (61I 2uidelines.

5.1.!.1 FFls are ermitted to in*est throu2h (61I re2istered De ository Partici ants %DPs'

5.1.!.2

The indi*idual and a22re2ate in*estment limits for the FFls shall 3e -R and 1#R res ecti*ely of the aid u ca ital of an Indian com any. These limits shall 3e within

FPI a22re2ate limits. Further" where*er there are com osite sectoral ca s under the eCtant FDI olicy" these limits for FFI in*estment in e@uity shares shall also 3e within such o*erall FDI sectoral ca s. 5.1.!.5 Di*idend ayments on e@uity shares held 3y FFls can either 3e directly remitted to the desi2nated o*erseas 3ank accounts of the FFIs or credited to the sin2le non.interest 3earin2 8u ee account. 1) 5.2.1 5.2.2 %i' Entities into <,ic, FDI can &e made FDI in an Indian Company( Indian com anies can issue ca ital a2ainst FDI. FDI in Partners,ip FirmHProprietary Concern( A ,on.8esident Indian %,8I' or a Person of Indian 0ri2in %PI0' resident outside India can in*est in the ca ital of a firm or a ro rietary concern in India on non.re atriation 3asis ro*idedL %a' %3' %c' %ii' Amount is in*ested 3y inward remittance or out of ,86+FC,8%1'+,80 account maintained with AuthoriKed Dealers+AuthoriKed 3anks. The firm or ro rietary concern is not en2a2ed in any a2ricultural+ lantation or real estate 3usiness or rint media sector. Amount in*ested shall not 3e eli2i3le for re atriation outside India. In*estments with re atriation o tion/ ,8Is+PI0 may seek rior ermission of 8eser*e 1ank for in*estment in sole ro rietorshi concerns+ artnershi firms with re atriation o tion. The a lication will 3e decided in consultation with the )o*ernment of India. %iii' In*estment 3y non.residents other than ,8Is+PI0/ A erson resident outside India other than ,8Is+PI0 may make an a lication and seek rior a ro*al of 8eser*e 1ank for makin2 in*estment in the ca ital of a firm or a ro rietorshi concern or any association of ersons in India. The a lication will 3e decided in consultation with the )o*ernment of India. %i*' 5.2.5 8estrictions/ An ,8I or PI0 is not allowed to in*est in a firm or ro rietorshi concern en2a2ed in any a2ricultural+ lantation acti*ity or real estate 3usiness or rint media. FDI in 7enture Capital Fund (7CF#/ FHCIs are allowed to in*est in Indian Henture Ca ital Jndertakin2s %IHCJs'+Henture Ca ital Funds %HCFs'+other com anies" as stated in ara2ra h 5.1.: of this Circular. If a domestic HCF is set u as a trust" a erson resident outside India %non.resident entity+indi*idual includin2 an ,8I' can in*est in such domestic HCF su3&ect to a ro*al of the FIP1. 9owe*er" if a domestic HCF is set.u as an incor orated com any under the Com anies Act" 1=-:" then a erson resident outside India %non.resident entity+indi*idual includin2 an ,8I' can in*est in such domestic HCF under the automatic route of FDI (cheme" su3&ect to the 1$

ricin2 2uidelines" re ortin2 re@uirements" mode of ayment" minimum ca italiKation norms" etc. 5.2.$ 5.2.FDI in Drusts( FDI in Trusts other than HCF is not ermitted. FDI in @imited @ia&ility Partners,ips (@@Ps#/ FDI in ??Ps is ermitted" su3&ect to the followin2 conditions/ %a' FDI will 3e allowed" throu2h the )o*ernment a ro*al route" only in ??Ps o eratin2 in sectors+acti*ities where 1##R FDI is allowed" throu2h the automatic route and there are no FDI.linked erformance conditions %such as 4,on 1ankin2 Finance Com anies4 or 4De*elo ment of Townshi s" 9ousin2" 1uilt.u infrastructure and Construction.de*elo ment ro&ects4 etc.'. %3' %c' ??Ps with FDI will not 3e allowed to o erate in a2ricultural+ lantation acti*ity" rint media or real estate 3usiness. An Indian com any" ha*in2 FDI" will 3e ermitted to make downstream in*estment in an ??P only if 3oth.the com any" as well as the ??P. are o eratin2 in sectors where 1##R FDI is allowed" throu2h the automatic route and there are no FDI.linked erformance conditions. %d' %e' ??Ps with FDI will not 3e eli2i3le to make any downstream in*estments. Forei2n Ca ital artici ation in ??Ps will 3e allowed only 3y way of cash consideration" recei*ed 3y inward remittance" throu2h normal 3ankin2 channels or 3y de3it to ,86+FC,8 account of the erson concerned" maintained with an authoriKed dealer+authoriKed 3ank. %f' In*estment in ??Ps 3y Forei2n Portfolio In*estors %FPIs' and Forei2n Henture Ca ital In*estors %FHCIs' will not 3e %2' ermitted. ??Ps will also not 3e ermitted to a*ail 6Cternal Commercial 1orrowin2s %6C1s'. In case the ??P with FDI has a 3ody cor orate that is a desi2nated artner or nominates an indi*idual to act as a desi2nated artner in accordance with the ro*isions of (ection ! of the ??P Act" 2##>" such a 3ody cor orate should only 3e a com any re2istered in India under the Com anies Act" 1=-: and not any other 3ody" such as an ??P or a trust. %h' For such ??Ps" the desi2nated artner Iresident in IndiaI" as defined under the 46C lanation4 to (ection !%1' of the ??P Act" 2##>" would also ha*e to satisfy the definition of I erson resident in IndiaI" as rescri3ed under (ection 2%*'%i' of the Forei2n 6Cchan2e 7ana2ement Act" 1===.

1-

%i'

The desi2nated artners will 3e res onsi3le for com liance with all the a3o*e conditions and also lia3le for all contra*ention" if any. enalties im osed on the ??P for their

%&'

Con*ersion of a com any with FDI" into an ??P" will 3e allowed only if the a3o*e sti ulations %eCce t clause 5.2.-%e' which would 3e o tional in case of a com any' are met and with the rior a ro*al of FIP1+)o*ernment.

5.2.: 1)1 5.5.1

FDI in ot,er Entities( FDI in resident entities other than those mentioned a3o*e is not ermitted. Dypes of Instruments Indian com anies can issue e@uity shares" fully" com ulsorily and mandatorily con*erti3le de3entures and fully" com ulsorily and mandatorily con*erti3le reference shares su3&ect to ricin2 2uidelines+*aluation norms rescri3ed under F67A 8e2ulations. The rice+con*ersion formula of con*erti3le ca ital instruments should 3e determined u front at the time of issue of the instruments. The rice at the time of con*ersion should not in any case 3e lower than the fair *alue worked out" at the time of issuance of such instruments" in accordance with the eCtant F67A re2ulations Tthe DCF method of *aluation for the unlisted com anies and *aluation in terms of (61I %ICD8' 8e2ulations" for the listed com aniesU.

5.5.1.1 6@uity shares" fully" com ulsorily and mandatorily con*erti3le de3entures and fully" com ulsorily and mandatorily con*erti3le reference shares without any o tion+ri2ht to eCit at an assured rice shall 3e reckoned as eli2i3le ca ital instruments. 5.5.1.2 0 tionality clauses are allowed in e@uity shares" fully" com ulsorily and mandatorily con*erti3le de3entures and fully" com ulsorily and mandatorily con*erti3le reference shares under FDI scheme" su3&ect to the followin2 conditions/ %a' There is a minimum lock.in eriod of one year or a minimum lock.in eriod as rescri3ed under FDI 8e2ulations" whiche*er is hi2her %e.2. defence and construction de*elo ment sector where the lock.in eriod of three years has 3een rescri3ed'. The lock.in eriod shall 3e effecti*e from the date of allotment of such ca ital instruments or as rescri3ed under the FDI Policy" e.2 for defence and construction de*elo ment sectors" etc. %3' After the lock.in eriod" as a lica3le a3o*e" and su3&ect to FDI Policy er ro*isions" if any" in this re2ard" the non.resident in*estor eCercisin2 o tion+ri2ht shall 3e eli2i3le to eCit without any assured return" as ricin2+*aluation 2uidelines issued 3y 81I from time to time. 1:

5.5.2

0ther ty es of Preference shares+De3entures i.e. non.con*erti3le" o tionally con*erti3le or artially con*erti3le for issue of which funds ha*e 3een recei*ed on or after 7ay 1" 2##! are considered as de3t. Accordin2ly all norms a sti ulations" etc. shall a 0ffered 8ate %?I108' maturity. lica3le for 6C1s relatin2 to eli2i3le 3orrowers" reco2niKed lenders" amount and maturity" end.use ly. (ince these instruments would 3e denominated in ru ees" lus the s read as ermissi3le for 6C1s of corres ondin2 the ru ee interest rate will 3e 3ased on the swa e@ui*alent of ?ondon Inter3ank

5.5.5 5.5.$ %i'

The inward remittance recei*ed 3y the Indian com any *ide issuance of D8s and FCC1s are treated as FDI and counted towards FDI. Issue of s,ares &y Indian Companies under FCC2HAD6HGD6 Indian com anies can raise forei2n currency resources a3road throu2h the issue of FCC1+D8 %AD8s+)D8s'" in accordance with the (cheme for issue of Forei2n Currency Con*erti3le 1onds and 0rdinary (hares %Throu2h De ository 8ecei t 7echanism' (cheme" 1==5 and 2uidelines issued 3y the )o*ernment of India there under from time to time.

%ii'

A com any can issue AD8s+)D8s if it is eli2i3le to issue shares to ersons resident outside India under the FDI Policy. 9owe*er" an Indian listed com any" which is not eli2i3le to raise funds from the Indian Ca ital 7arket includin2 a com any which has 3een restrained from accessin2 the securities market 3y the (ecurities and 6Cchan2e 1oard of India %(61I' will not 3e eli2i3le to issue AD8s+)D8s.

%iii'

Jnlisted com anies shall 3e allowed to raise ca ital a3road without the re@uirement of rior or su3se@uent listin2 in India initially for a eriod of two years w.e.f 11 0cto3er" 2#15" su3&ect to the followin2 conditions/ %a' Jnlisted com anies shall list a3road only on eCchan2es in I0(C0+FATF com liant &urisdictions or those with which (61I has si2ned 3ilateral a2reementsL %3' The Com anies shall file a co y of the return which they su3mit to the ro osed eCchan2e+re2ulators also to (61I for the ur ose of Pre*ention of 7oney ?aunderin2 Act %P7?A'. They shall com ly with (61IAs disclosure re@uirements in addition to that of the rimary eCchan2e rior to the listin2 a3roadL %c' ;hile raisin2 resources a3road" the listin2 com any shall 3e fully com liant with the FDI olicy in forceL 1!
th

%d' %e'

The ca ital raised a3road may 3e utiliKed for retirin2 outstandin2 o*erseas de3t or for 3ona fide o erations a3road includin2 for ac@uisitionsL In case the funds raised are not utiliKed a3road as sti ulated at %d' a3o*e" such com anies shall remit the money 3ack to India within 1- days from the date of raisin2 of funds and such money shall 3e arked only in AD Cate2ory.1 3anks reco2niKed 3y 81I and may 3e used domesticallyL

%f'

The AD8s+)D8s shall 3e issued su3&ect to sectoral ca " entry route" minimum ca italiKation norms" ricin2 norms" etc. as a notified from time to timeL lica3le as er FDI re2ulations

%2' %h'

The ricin2 of such AD8s+)D8s to 3e issued to a erson resident outside India shall 3e determined in accordance with su3. ara2ra h 5.5.$ %*iii' 3elowL The num3er of underlyin2 e@uity shares offered for issuance of AD8s+)D8s to 3e ke t with the local custodian shall 3e determined u front and ratio of AD8s+)D8s to e@uity shares shall 3e decided u front 3ased on a lica3le FDI ricin2 norms of e@uity shares of unlisted com anyL

%i' %&' %i*'

The unlisted Indian com any shall com ly with the instructions on downstream in*estment as notified from time to timeL The criteria of eli2i3ility of unlisted com any raisin2 funds throu2h AD8s+)D8s shall 3e as rescri3ed 3y )o*ernment of IndiaL

There are no end.use restrictions eCce t for a 3an on de loyment+in*estment of such funds in real estate or the stock market. There is no monetary limit u to which an Indian com any can raise AD8s+)D8s.

%*'

The AD8+)D8 roceeds can 3e utiliKed for first sta2e ac@uisition of shares in the disin*estment rocess of Pu3lic (ector Jndertakin2s+6nter rises and also in the mandatory second sta2e offer to the u3lic in *iew of their strate2ic im ortance.

%*i'

Hotin2 ri2hts on shares issued under the (cheme shall 3e as er the ro*isions of Com anies Act" 1=-: and in a manner in which restrictions on *otin2 ri2hts im osed on AD8+)D8 issues shall 3e consistent with the Com any ?aw ro*isions. Hotin2 ri2hts in the case of 3ankin2 com anies will continue to 3e in terms of the ro*isions of the 1ankin2 8e2ulation Act" 1=$= and the instructions issued 3y the 8eser*e 1ank from time to time" as a lica3le to all shareholders eCercisin2 *otin2 ri2hts.

%*ii' 6rstwhile 0C1s who are not eli2i3le to in*est in India and entities rohi3ited from 3uyin2" sellin2 or dealin2 in securities 3y (61I will not 3e eli2i3le to su3scri3e to AD8s+ )D8s issued 3y Indian com anies.

1>

%*iii' The ricin2 of AD8+)D8 issues should 3e made at a rice determined under the ro*isions of the (cheme of issue of Forei2n Currency Con*erti3le 1onds and 0rdinary (hares %throu2h De ository 8ecei t 7echanism' (cheme" 1==5 and 2uidelines issued 3y the )o*ernment of India and directions issued 3y the 8eser*e 1ank" from time to time. %iC' The ricin2 of s onsored AD8s+)D8s would 3e determined under the ro*isions of the (cheme of issue of Forei2n Currency Con*erti3le 1onds and 0rdinary (hares %Throu2h De ository 8ecei t 7echanism' (cheme" 1==5 and 2uidelines issued 3y the )o*ernment of India and directions issued 3y the 8eser*e 1ank" from time to time. 5.5.- %i' D<o-<ay Fun+i&ility %c,eme( A limited two.way Fun2i3ility scheme has 3een ut in lace 3y the )o*ernment of India for AD8s+)D8s. Jnder this (cheme" a stock 3roker in India" re2istered with (61I" can urchase shares of an Indian com any from the market for con*ersion into AD8s+)D8s 3ased on instructions recei*ed from o*erseas in*estors. 8e.issuance of AD8s+)D8s would 3e market. %ii' %ponsored AD6HGD6 issue( An Indian com any can also s onsor an issue of AD8+)D8. Jnder this mechanism" the com any offers its resident shareholders a choice to su3mit their shares 3ack to the com any so that on the 3asis of such shares" AD8s+)D8s can 3e issued a3road. The roceeds of the AD8+)D8 issue are remitted 3ack to India and distri3uted amon2 the resident in*estors who had offered their 8u ee denominated shares for con*ersion. These roceeds can 3e ke t in 8esident Forei2n Currency %Domestic' accounts in India 3y the resident shareholders who ha*e tendered such shares for con*ersion into AD8s+)D8s. 1)" 5.$.1 IssueHDransfer of %,ares The ca ital instruments should 3e issued within 1># days from the date of recei t of the inward remittance recei*ed throu2h normal 3ankin2 channels includin2 escrow account o ened and maintained for the ur ose or 3y de3it to the ,86+FC,8 %1' account of the non.resident in*estor. In case" the ca ital instruments are not issued within 1># days from the date of recei t of the inward remittance or date of de3it to the ,86+FC,8 %1' account" the amount of consideration so recei*ed should 3e refunded immediately to the non.resident in*estor 3y outward remittance throu2h normal 3ankin2 channels or 3y credit to the ,86+FC,8 %1' account" as the case may 3e. ,on.com liance with the a3o*e ro*ision would 3e reckoned as a contra*ention under F67A and would attract enal ro*isions. In eCce tional cases" refund of the amount 1= ermitted to the eCtent of AD8s+)D8s which ha*e 3een redeemed into underlyin2 shares and sold in the Indian

of consideration outstandin2 3eyond a eriod of 1># days from the date of recei t may 3e considered 3y the 81I" on the merits of the case. 5.$.2 a. 3. Issue price of s,ares V Price of shares issued to ersons resident outside India under the FDI Policy" shall not 3e less than . the rice worked out in accordance with the (61I 2uidelines" as a lica3le" where the shares of the com any are listed on any reco2nised stock eCchan2e in IndiaL the fair *aluation of shares done 3y a (61I re2istered 7erchant 1anker or a Chartered Accountant as er the discounted free cash flow method" where the shares of the com any are not listed on any reco2nised stock eCchan2e in IndiaL and c. the rice as a lica3le to transfer of shares from resident to non.resident as er the ricin2 2uidelines laid down 3y the 8eser*e 1ank from time to time" where the issue of shares is on referential allotment. 9owe*er" where non.residents %includin2 ,8Is' are makin2 in*estments in an Indian com any in com liance with the ro*isions of the Com anies Act" 1=-:" 3y way of su3scri tion to its 7emorandum of Association" such in*estments may 3e made at face *alue su3&ect to their eli2i3ility to in*est under the FDI scheme. 5.$.5 Forei+n Currency Account V Indian com anies which are eli2i3le to issue shares to ersons resident outside India under the FDI Policy may 3e allowed to retain the share su3scri tion amount in a Forei2n Currency Account" with the rior a 5.$.$ %i' Dransfer of s,ares and converti&le de&entures V (u3&ect to FDI sectoral olicy %relatin2 to sectoral ca s and entry routes'" a lica3le laws and other conditionalities includin2 security conditions" non.resident in*estors can also in*est in Indian com anies 3y urchasin2+ac@uirin2 eCistin2 shares from Indian shareholders or from other non.resident shareholders. )eneral ermission has 3een 2ranted to non.residents+,8Is for ac@uisition of shares 3y way of transfer su3&ect to the followin2/ %a' A erson resident outside India %other than ,8I and erstwhile 0C1' may transfer 3y way of sale or 2ift" the shares or con*erti3le de3entures to any erson resident outside India %includin2 ,8Is'. %3' %c' %d' ,8Is may transfer 3y way of sale or 2ift the shares or con*erti3le de3entures held 3y them to another ,8I. A erson resident outside India can transfer any security to a erson resident in India 3y way of 2ift. A erson resident outside India can sell the shares and con*erti3le de3entures of an Indian com any on a reco2niKed (tock 6Cchan2e in India throu2h a stock 2# ro*al of 81I.

3roker re2istered with stock eCchan2e or a merchant 3anker re2istered with (61I. %e' A erson resident in India can transfer 3y way of sale" shares+con*erti3le de3entures %includin2 transfer of su3scri3erAs shares'" of an Indian com any under ri*ate arran2ement to a erson resident outside India" su3&ect to the 2uidelines 2i*en in ara 5.$.-.2 and Anne*- . %f' )eneral ermission is also a*aila3le for transfer of shares+con*erti3le de3entures" 3y way of sale under ri*ate arran2ement 3y a erson resident outside India to a erson resident in India" su3&ect to the 2uidelines 2i*en in ara 5.$.-.2 and Anne*- . %2' The a3o*e )eneral Permission also co*ers transfer 3y a resident to a non. resident of shares+con*erti3le de3entures of an Indian com any" en2a2ed in an acti*ity earlier co*ered under the )o*ernment 8oute 3ut now fallin2 under Automatic 8oute" as well as transfer of shares 3y a non.resident to an Indian com any under 3uy3ack and+or ca ital reduction scheme of the com any. %h' The Form FC.T8( should 3e su3mitted to the AD Cate2ory.I 1ank" within :# days from the date of recei t of the amount of consideration. The onus of su3mission of the Form FC.T8( within the 2i*en timeframe would 3e on the transferor+transferee" resident in India. %ii' The sale consideration in res ect of e@uity instruments urchased 3y a erson resident outside India" remitted into India throu2h normal 3ankin2 channels" shall 3e su3&ected to a Dnow Eour Customer %DEC' check 3y the remittance recei*in2 AD Cate2ory.I 3ank at the time of recei t of funds. In case" the remittance recei*in2 AD Cate2ory.I 3ank is different from the AD Cate2ory.I 3ank handlin2 the transfer transaction" the DEC check should 3e carried out 3y the remittance recei*in2 3ank and the DEC re ort 3e su3mitted 3y the customer to the AD Cate2ory.I 3ank carryin2 out the transaction alon2 with the Form FC.T8(. %iii' A erson resident outside India includin2 a ,on.8esident Indian in*estor who has already ac@uired and continues to hold the control in accordance with the (61I %(u3stantial Ac@uisition of (hares and Takeo*er' 8e2ulations can ac@uire shares of a listed Indian com any on the stock eCchan2e throu2h a re2istered 3roker under FDI scheme ro*ided that the ori2inal and resultant in*estments are in line with the eCtant FDI olicy and F67A re2ulations in res ect of sectoral ca " entry route" mode of ayment" re ortin2 re@uirement" documentation" etc.

21

%i*'

Escro<( AD Cate2ory.I 3anks ha*e 3een 2i*en 2eneral ermission to o en 6scrow account and ( ecial account of non.resident cor orate for o en offers+eCit offers and delistin2 of shares. The rele*ant (61I %(u3stantial Ac@uisition of (hares and Takeo*ers' 8e2ulations" 2#11 %(A(T' 8e2ulations or any other a 8e2ulations+ ro*isions of the Com anies Act" 1=-: will 3e a 3anks ha*e also 3een ermitted to o en and maintain" without rior a lica3le (61I ro*al of 81I" lica3le. AD Cate2ory.I

non-interest &earin+ 6scrow accounts in Indian 8u ees in India on 3ehalf of residents and+or non.residents" towards ayment of share urchase consideration and+or ro*ide 6scrow facilities for kee in2 securities to facilitate FDI transactions su3&ect to the terms and conditions s ecified 3y 81I. (61I authorised De ository Partici ants ha*e also 3een ermitted to o en and maintain" without rior a ro*al of 81I" 6scrow accounts for securities su3&ect to the terms and conditions as s ecified 3y 81I. In 3oth cases" the 6scrow a2ent shall necessarily 3e an AD Cate2ory.I 3ank or (61I authorised De ository Partici ant %in case of securitiesA accounts'. These facilities will 3e a lica3le for 3oth issue of fresh shares to the non. residents as well as transfer of shares from+to the non. residents. 5.$.Prior permission of 62I in certain cases for transfer of capital instruments a %a' ro*al of 81I/ Transfer is at a rice which falls outside the ricin2 2uidelines s ecified 3y the 8eser*e 1ank from time to time and the transaction does not fall under the eCce tion 2i*en in ara 5.$.-.2. %3' Transfer of ca ital instruments 3y the non.resident ac@uirer in*ol*in2 deferment of ayment of the amount of consideration. Further" in case a ro*al is 2ranted for a transaction" the same should 3e re orted in Form FC.T8(" to an AD Cate2ory.I 3ank for necessary due dili2ence" within :# days from the date of recei t of the full and final amount of consideration. %ii' Transfer of any ca ital instrument" 3y way of 2ift 3y a erson resident in India to a erson resident outside India. ;hile forwardin2 a lications to 8eser*e 1ank for a ro*al for transfer of ca ital instruments 3y way of 2ift" the documents mentioned in rocessin2 such a lications/ Anne*-1 should 3e enclosed. 8eser*e 1ank considers the followin2 factors while 5.$.-.1 6Cce t cases mentioned in ara2ra h 5.$.-.2 3elow" the followin2 cases re@uire rior %i' Transfer of ca ital instruments from resident to non.residents 3y way of sale where /

22

%a'

The ro osed transferee %donee' is eli2i3le to hold such ca ital instruments under (chedules 1" $ and - of ,otification ,o. F67A 2#+2###.81 dated 7ay 5" 2###" as amended from time to time.

%3' %c' %d'

The 2ift does not eCceed The a

er cent of the

aid.u

ca ital of the Indian

com any+each series of de3entures+each mutual fund scheme. lica3le sectoral ca limit in the Indian com any is not 3reached. The transferor %donor' and the ro osed transferee %donee' are close relati*es as defined in (ection : of the Com anies Act" 1=-:" as amended from time to time. The current list is re roduced in Anne*-". %e' The *alue of ca ital instruments to 3e transferred to2ether with any ca ital instruments already transferred 3y the transferor" as 2ift" to any erson residin2 outside India does not eCceed the ru ee e@ui*alent of J(D -#"### durin2 the financial year. %f' (uch other conditions as sti ulated 3y 8eser*e 1ank in u3lic interest from time to time. %iii' Transfer of shares from ,8I to non.resident. 5.$.-.2 In the followin2 cases" a ro*al of 81I is not re@uired/ A) Dransfer of s,ares from a 4on-6esident to 6esident under t,e FDI sc,eme <,ere t,e pricin+ +uidelines under FEMA, 1333 are not met provided t,at/ i. The ori2inal and resultant in*estment are in line with the eCtant FDI olicy and F67A re2ulations in terms of sectoral ca s" conditionalities %such as minimum ca italiKation" etc.'" re ortin2 re@uirements" documentation" etc.L ii. The ricin2 for the transaction is com liant with the s ecific+eC licit" eCtant and rele*ant (61I re2ulations+2uidelines %such as IP0" 1ook 3uildin2" 3lock deals" delistin2" eCit" o en offer+su3stantial ac@uisition+(61I (A(T" 3uy 3ack'L and iii. Chartered Accountants Certificate to the effect that com liance with the rele*ant (61I re2ulations+2uidelines as indicated a3o*e is attached to the form FC.T8( to 3e filed with the AD 3ank. 2) Dransfer of s,ares from 6esident to 4on-6esident( i# <,ere t,e transfer of s,ares reGuires t,e prior approval of t,e Government conveyed t,rou+, FIP2 as er the eCtant FDI olicy ro*ided that/ a' 3' the re@uisite a ro*al of the FIP1 has 3een o3tainedL and the transfer of share adheres with the ricin2 2uidelines and documentation re@uirements as s ecified 3y the 8eser*e 1ank of India from time to time. 25

ii# <,ere t,e transfer of s,ares attract %E2I (%A%D# 6e+ulations su3&ect to the adherence with the ricin2 2uidelines and documentation re@uirements as s ecified 3y 8eser*e 1ank of India from time to time. iii# <,ere t,e transfer of s,ares does not meet t,e pricin+ +uidelines under t,e FEMA, 1333 provided t,at( a' The resultant FDI is in com liance with the eCtant FDI olicy and F67A re2ulations in terms of sectoral ca s" conditionalities %such as minimum ca italiKation" etc.'" re ortin2 re@uirements" documentation etc.L 3' The ricin2 for the transaction is com liant with the s ecific+eC licit" eCtant and rele*ant (61I re2ulations+2uidelines %such as IP0" 1ook 3uildin2" 3lock deals" delistin2" eCit" o en offer+su3stantial ac@uisition+(61I (A(T'L and c' Chartered Accountants Certificate to the effect that com liance with the rele*ant (61I re2ulations+2uidelines as indicated a3o*e is attached to the form FC.T8( to 3e filed with the AD 3ank. iv# <,ere t,e investee company is in t,e financial sector provided t,at ( a' Any Gfit and ro er+due dili2enceA re@uirements as re2ards the non.resident in*estor as sti ulated 3y the res ecti*e financial sector re2ulator" from time to time" ha*e 3een com lied withL and 3' The FDI olicy and F67A re2ulations in terms of sectoral ca s" ricin2" etc.'" re ortin2 conditionalities %such as minimum ca italiKation" re@uirements" documentation etc." are com lied with. 5.$.: %i' Conversion of EC2H@ump sum FeeH6oyalty etc) into EGuity Indian com anies ha*e 3een 2ranted 2eneral ermission for con*ersion of 6Cternal Commercial 1orrowin2s %6C1' %eCcludin2 those deemed as 6C1' in con*erti3le forei2n currency into e@uity shares+fully com ulsorily and mandatorily con*erti3le reference shares" su3&ect to the followin2 conditions and re ortin2 re@uirements/ %a' The acti*ity of the com any is co*ered under the Automatic 8oute for FDI or the com any has o3tained )o*ernment a com anyL %3' %c' %d' The forei2n e@uity after con*ersion of 6C1 into e@uity is within the sectoral ca " if anyL Pricin2 of shares is as er the ro*ision of ara 5.$.2 a3o*eL Com liance with the re@uirements re2ulation in forceL and rescri3ed under any other statute and ro*al for forei2n e@uity in the

2$

%e'

The con*ersion facility is a*aila3le for 6C1s a*ailed under the Automatic or )o*ernment 8oute and is a lica3le to 6C1s" due for ayment or not" as well as secured+unsecured loans a*ailed from non.resident colla3orators.

%ii'

)eneral ermission is also a*aila3le for issue of shares+ reference shares a2ainst lum sum technical know.how fee" royalty due for ayment" su3&ect to entry route" sectoral ca and ricin2 2uidelines %as er the ro*ision of ara 5.$.2 a3o*e' and com liance with a lica3le taC laws.

%iii' Issue of e@uity shares under the FDI olicy is allowed under the )o*ernment route for the followin2/ %I' %a' im ort of ca ital 2oods+ machinery+ e@ui ment %eCcludin2 second.hand machinery'" su3&ect to com liance with the followin2 conditions/ Any im ort of ca ital 2oods+machinery etc." made 3y a resident in India" has to 3e in accordance with the 6C ort+Im ort Policy issued 3y )o*ernment of India+as defined 3y D)FT+F67A ro*isions relatin2 to im orts. %3' %c' The a lication clearly indicatin2 the 3eneficial ownershi and identity of the Im orter Com any as well as o*erseas entity. A lications com lete in all res ects" for con*ersions of im ort aya3les for ca ital 2oods into FDI 3ein2 made within 1># days from the date of shi ment of 2oods. %II' re.o erati*e+ re.incor oration eC enses %includin2 su3&ect to com liance with the followin2 conditions/ %a' %3' %c' (u3mission of FI8C for remittance of funds 3y the o*erseas romoters for the eC enditure incurred. Herification and certification of the eC enses 3y the statutory auditor. Payments should 3e made 3y the forei2n in*estor to the com any directly or throu2h the 3ank account o ened 3y the forei2n in*estor as ro*ided under F67A 8e2ulations. %d' The a lications" com lete in all res ects" for ca italiKation 3ein2 made within the eriod of 1># days from the date of incor oration of the com any )eneral conditions/ %i' All re@uests for con*ersion should 3e accom anied 3y a s ecial resolution of the com any. 2re.incor oration+ re.o erati*e ayments of rent etc.'"

%ii' 1)/ 5.-.1

)o*ernmentAs a a

ro*al would 3e su3&ect to

ricin2 2uidelines of 81I and

ro riate taC clearance.

%pecific Conditions in Certain Cases Issue of 6i+,tsH2onus %,ares V F67A ro*isions allow Indian com anies to freely issue 8i2hts+1onus shares to eCistin2 non.resident shareholders" su3&ect to adherence to sectoral ca " if any. 9owe*er" such issue of 3onus+ri2hts shares has to 3e in accordance with other laws+statutes like the Com anies Act" 1=-:" (61I %Issue of Ca ital and Disclosure 8e@uirements' 8e2ulations" 2##= %in case of listed com anies'" etc. The offer on ri2ht 3asis to the ersons resident outside India shall 3e/ %a' %3' in the case of shares of a com any listed on a reco2niKed stock eCchan2e in India" at a rice as determined 3y the com anyL in the case of shares of a com any not listed on a reco2niKed stock eCchan2e in India" at a rice which is not less than the rice at which the offer on ri2ht 3asis is made to resident shareholders.

5.-.2

Prior permission of 62I for 6i+,ts issue to erst<,ile .C2s- 0C1s ha*e 3een de. reco2nised as a class of in*estors from (e tem3er 1:" 2##5. Therefore com anies desirin2 to issue ri2hts share to such erstwhile 0C1s will ha*e to take s ecific rior ermission from 81I. As such" entitlement of ri2hts share is not automatically a*aila3le to erstwhile 0C1s. 9owe*er 3onus shares can 3e issued to erstwhile 0C1s without the a ro*al of 81I.

5.-.5

Additional allocation of ri+,ts s,are &y residents to non-residents I 6Cistin2 non. resident shareholders are allowed to a ly for issue of additional shares+fully" com ulsorily and mandatorily con*erti3le de3entures+fully" com ulsorily and mandatorily con*erti3le reference shares o*er and a3o*e their ri2hts share entitlements. The in*estee com any can allot the additional ri2hts share out of unsu3scri3ed ortion" su3&ect to the condition that the o*erall issue of shares to non. residents in the total aid.u ca ital of the com any does not eCceed the sectoral ca .

5.-.$

AcGuisition of s,ares under %c,eme of Mer+erHDemer+erHAmal+amation 7er2ersHdemer2ersH amal2amations of com anies in India are usually 2o*erned 3y an order issued 3y a com etent Court on the 3asis of the (cheme su3mitted 3y the com anies under2oin2 mer2erHdemer2erHamal2amation. 0nce the scheme of mer2er or demer2er or amal2amation of two or more Indian com anies has 3een a ro*ed 3y a Court in India" the transferee com any or new com any is allowed to issue shares to the shareholders of the transferor com any resident outside India" su3&ect to the conditions that/ 2:

%i' %ii' 5.-.$.1

the

ercenta2e of shareholdin2 of

ersons resident outside India in the

transferee or new com any does not eCceed the sectoral ca " and the transferor com any or the transferee or the new com any is not en2a2ed in acti*ities which are rohi3ited under the FDI olicy. Issue of 4on converti&leHredeema&le &onus preference s,ares or de&entures Indian com anies are allowed to issue non.con*erti3le+redeema3le reference shares or de3entures to non.resident shareholders" includin2 the de ositories that act as trustees for the AD8+)D8 holders" 3y way of distri3ution as 3onus from its 2eneral reser*es under a (cheme of Arran2ement a ro*ed 3y a Court in India under the ro*isions of the Com anies Act" as a Authorities. 5.-.Issue of s,ares under Employees %toc9 .ption %c,eme (E%.Ps# I %i' ?isted Indian com anies are allowed to issue shares under the 6m loyees (tock 0 tion (cheme %6(0Ps'" to its em loyees or em loyees of its &oint *enture or wholly owned su3sidiary a3road" who are resident outside India" other than to the citiKens of Pakistan. 6(0Ps can 3e issued to citiKens of 1an2ladesh with the rior a ro*al of FIP1. (hares under 6(0Ps can 3e issued directly or throu2h a Trust su3&ect to the condition that/ %a' %3' The scheme has 3een drawn in terms of rele*ant re2ulations issued 3y the (61I" and The face *alue of the shares to 3e allotted under the scheme to the non. resident em loyees does not eCceed - er cent of the aid.u ca ital of the issuin2 com any. %ii' Jnlisted com anies ha*e to follow the ro*isions of the Com anies Act" 1=-:. The Indian com any can issue 6(0Ps to em loyees who are resident outside India" other than to the citiKens of Pakistan. 6(0Ps can 3e issued to the citiKens of 1an2ladesh with the rior a %iii' ro*al of the FIP1. The issuin2 com any is re@uired to re ort % lain a er re ortin2' the details of 2rantin2 of stock o tions under the scheme to non.resident em loyees to the 8e2ional 0ffice concerned of the 8eser*e 1ank and thereafter the details of issue of shares su3se@uent to the eCercise of such stock o tions within 5# days from the date of issue of shares in Form FC.)P8. 5.-.: %,are %<ap/ In cases of in*estment 3y way of swa of shares" irres ecti*e of the amount" *aluation of the shares will ha*e to 3e made 3y a 7erchant 1anker re2istered with (61I or an In*estment 1anker outside India re2istered with the a ro riate 2! lica3le" su3&ect to no.o3&ection from the Income TaC

re2ulatory authority in the host country. A ro*al of the )o*ernment con*eyed throu2h Forei2n In*estment Promotion 1oard %FIP1' will also 3e a rere@uisite for in*estment 3y swa of shares. 5.-.! (A# Pled+e of %,ares( A erson 3ein2 a romoter of a com any re2istered in India %3orrowin2 com any'" which has raised eCternal commercial 3orrowin2s" may led2e the shares of the 3orrowin2 com any or that of its associate resident com anies for the ur ose of securin2 the 6C1 raised 3y the 3orrowin2 com any" ro*ided that a no o3&ection for the same is o3tained from a 3ank which is an authorised dealer. The authoriKed dealer" shall issue the no o3&ection for such a led2e after ha*in2 satisfied itself that the eCternal commercial 3orrowin2 is in line with the eCtant F67A re2ulations for 6C1s and that/ i' ii' iii' the loan a2reement has 3een si2ned 3y 3oth the lender and the 3orrower" there eCists a security clause in the ?oan A2reement re@uirin2 the 3orrower to create char2e on financial securities" and the 3orrower has o3tained ?oan 8e2istration ,um3er %?8,' from the 8eser*e 1ank/ and the said led2e would 3e su3&ect to the followin2 conditions/ a' 3' c' (2# the eriod of such led2e shall 3e co.terminus with the maturity of the underlyin2 6C1L in case of in*ocation of led2e" transfer shall 3e in accordance with the eCtant FDI Policy and directions issued 3y the 8eser*e 1ankL the (tatutory Auditor has certified that the 3orrowin2 com any will utiliKed+has utiliKed the roceeds of the 6C1 for the ermitted end use+s only. ,on.residents holdin2 shares of an Indian com any" can led2e these shares in fa*our of the AD 3ank in India to secure credit facilities 3ein2 eCtended to the resident in*estee com any for 3onafide 3usiness ur ose" su3&ect to the followin2 conditions/ %i' %ii' in case of in*ocation of led2e" transfer of shares should 3e in accordance with the FDI olicy in *o2ue at the time of creation of led2eL su3mission of a declaration+ annual certificate from the statutory auditor of the in*estee com any that the loan roceeds will 3e + ha*e 3een utiliKed for the declared ur oseL %iii' %i*' the Indian com any has to follow the rele*ant (61I disclosure normsL and led2e of shares in fa*our of the lender %3ank' would 3e su3&ect to (ection 1= of the 1ankin2 8e2ulation Act" 1=$=. 2>

(C#

,on.residents holdin2 shares of an Indian com any" can led2e these shares in fa*our of an o*erseas 3ank to secure the credit facilities 3ein2 eCtended to the non.resident in*estor+non.resident romoter of the Indian com any or its o*erseas 2rou com any" su3&ect to the followin2/ %i' %ii' %iii' %i*' %*' loan is a*ailed of only from an o*erseas 3ankL loan is utiliKed for 2enuine 3usiness ur oses o*erseas and not for any in*estments either directly or indirectly in IndiaL o*erseas in*estment should not result in any ca ital inflow into IndiaL in case of in*ocation of led2e" transfer should 3e in accordance with the FDI olicy in *o2ue at the time of creation of led2eL and su3mission of a declaration+annual certificate from a Chartered Accountant+ Certified Pu3lic Accountant of the non.resident 3orrower that the loan roceeds will 3e + ha*e 3een utiliKed for the declared ur ose.

1)0 5.:.1

Entry 6outes for Investment( In*estments can 3e made 3y non.residents in the e@uity shares+fully" com ulsorily and mandatorily con*erti3le de3entures+fully" com ulsorily and mandatorily con*erti3le reference shares of an Indian com any" throu2h the Automatic 8oute or the )o*ernment 8oute. Jnder the Automatic 8oute" the non.resident in*estor or the Indian com any does not re@uire any a ro*al from )o*ernment of India for the in*estment. Jnder the )o*ernment 8oute" rior a ro*al of the )o*ernment of India is re@uired. Pro osals for forei2n in*estment under )o*ernment route" are considered 3y FIP1.

5.:.2

Guidelines for esta&lis,ment of Indian companiesH transfer of o<ners,ip or control of Indian companies, from resident Indian citi;ens to non-resident entities, in sectors <it, caps( In sectors+acti*ities with ca s" includin2 inter-alia defence roduction" air trans ort ser*ices" 2round handlin2 ser*ices" asset reconstruction com anies" 3ankin2" 3roadcastin2" commodity eCchan2es" credit information insurance" rint media" telecommunications and satellites" )o*ernment a a %i' %ii' %iii' ro*al would 3e re@uired in all cases where/ An Indian com any is 3ein2 esta3lished with forei2n in*estment and is not owned 3y a resident entity or An Indian com any is 3ein2 esta3lished with forei2n in*estment and is not controlled 3y a resident entity or The control of an eCistin2 Indian com any" currently owned or controlled 3y resident Indian citiKens and Indian com anies" which are owned or controlled 2= ri*ate sector com anies" ro*al+FIP1

3y resident Indian citiKens" will 3e+is 3ein2 transferred+ assed on to a non. resident entity as a conse@uence of transfer of shares and+or fresh issue of shares to non.resident entities throu2h amal2amation" mer2er+demer2er" ac@uisition etc. or %i*' The ownershi of an eCistin2 Indian com any" currently owned or controlled 3y resident Indian citiKens and Indian com anies" which are owned or controlled 3y resident Indian citiKens" will 3e+is 3ein2 transferred+ assed on to a non. resident entity as a conse@uence of transfer of shares and+or fresh issue of shares to non.resident entities throu2h amal2amation" mer2er+demer2er" ac@uisition etc. %*' It is clarified that these 2uidelines will not a ermitted under the automatic route. %*i' It is also clarified that Forei2n in*estment shall include all ty es of forei2n in*estments i.e. FDI" in*estment 3y FIIs" FPIs" FFIs" ,8Is" AD8s" )D8s" Forei2n Currency Con*erti3le 1onds %FCC1' and fully" mandatorily B com ulsorily con*erti3le reference shares+de3entures" re2ardless of whether the said in*estments ha*e 3een made under (chedule 1" 2" 2A" 5" : and > of F67A %Transfer or Issue of (ecurity 3y Persons 8esident 0utside India' 8e2ulations. 1)7 5.!.1 Caps on Investments In*estments can 3e made 3y non.residents in the ca ital of a resident entity only to the eCtent of the ercenta2e of the total ca ital as s ecified in the FDI olicy. The ca s in *arious sector%s' are detailed in Cha ter : of this circular. 1)5 5.>.1 Entry Conditions on Investment In*estments 3y non.residents can 3e ermitted in the ca ital of a resident entity in certain sectors+acti*ity with entry conditions. (uch conditions may include norms for minimum ca italiKation" lock.in 1)3 5.=.1 eriod" etc. The entry conditions in *arious sectors+acti*ities are detailed in Cha ter : of this circular. .t,er Conditions on Investment 2esides Entry Conditions 1esides the entry conditions on forei2n in*estment" the in*estment+in*estors are re@uired to com ly with all rele*ant sectoral laws" re2ulations" rules" security conditions" and state+local laws+re2ulations. ly to sectors+acti*ities where there are no forei2n in*estment ca s" that is" 1##R forei2n in*estment is

5#

1)1! 5.1#.1

Forei+n Investment intoHdo<nstream Investment &y Indian Companies The )uidelines for calculation of total forei2n in*estment" 3oth direct and indirect in an Indian com any" at e*ery sta2e of in*estment" includin2 downstream in*estment" ha*e 3een detailed in Para2ra h $.1.

5.1#.2

For the ur ose of this cha ter" %i' GDownstream in*estmentA means indirect forei2n in*estment" 3y one Indian com any" into another Indian com any" 3y way of su3scri tion or ac@uisition" in terms of Para2ra h $.1. Para2ra h $.1.5 ara2ra h $.1.5 %*'. %ii' GForei2n In*estmentA would ha*e the same meanin2 as in Para2ra h $.1 ro*ides the 2uidelines for calculation of indirect forei2n in*estment" with conditions s ecified in

5.1#.5

Forei+n investment into an Indian company en+a+ed only in t,e activity of investin+ in t,e capital of ot,er Indian companyHies (re+ardless of its o<ners,ip or control#(

5.1#.5.1 Forei2n in*estment into an Indian com any" en2a2ed only in the acti*ity of in*estin2 in the ca ital of other Indian com any+ies" will re@uire a rior )o*ernment+FIP1 ro*ed for ro*al" re2ardless of the amount or eCtent of forei2n in*estment. Forei2n in*estment

into ,on.1ankin2 Finance Com anies %,1FCs'" carryin2 on acti*ities a

FDI" will 3e su3&ect to the conditions s ecified in ara2ra h :.2.1!.> of this Circular. 5.1#.5.2 Those com anies" which are Core In*estment Com anies %CICs'" will ha*e to additionally follow 81IAs 8e2ulatory Framework for CICs. 5.1#.5.5 For infusion of forei2n in*estment into an Indian com any which does not ha*e any o erations and also does not ha*e any downstream in*estments" )o*ernment+FIP1 a ro*al would 3e re@uired" re2ardless of the amount or eCtent of forei2n in*estment. Further" as and when such a com any commences 3usiness%s' or makes downstream in*estment" it will ha*e to com ly with the rele*ant sectoral conditions on entry route" conditionalities and ca s. 4ote( 5.1#.$ Forei2n in*estment into other Indian com anies would 3e in accordance+ com liance with the rele*ant sectoral conditions on entry route" conditionalities and ca s. Do<nstream investment &y an Indian company <,ic, is controlled &y resident entityHies( 5.1#.$.1 Downstream in*estment 3y an Indian com any" which is not owned and+or controlled 3y resident entity+ies" into another Indian com any" would 3e in accordance+com liance with the rele*ant sectoral conditions on entry route" 51 not o<ned andHor

conditionalities and ca s" with re2ard to the sectors in which the latter Indian com any is o eratin2. 4ote( Downstream in*estment+s made 3y a 3ankin2 com any" as defined in clause %c' of (ection - of the 1ankin2 8e2ulation Act" 1=$=" incor orated in India" which is owned and+or controlled 3y non.residents+a non.resident entity+non.resident entities" under Cor orate De3t 8estructurin2 %CD8'" or other loan restructurin2 mechanism" or in tradin2 3ooks" or for ac@uisition of shares due to defaults in loans" shall not count towards indirect forei2n in*estment. 9owe*er" their 4strate2ic downstream in*estment4 shall count towards indirect forei2n in*estment. For this ur ose" 4strate2ic downstream in*estments4 would mean in*estment 3y these 3ankin2 com anies in their su3sidiaries" &oint *entures and associates. 5.1#.$.2 Downstream in*estments 3y Indian com anies will 3e su3&ect to the followin2 conditions/ %i' (uch a com any is to notify (IA" DIPP and FIP1 of its downstream in*estment in the form a*aila3le at htt /++www.fi 3india.com within 5# days of such in*estment" e*en if ca ital instruments ha*e not 3een allotted alon2 with the modality of in*estment in new+eCistin2 *entures %with+without eC ansion ro2ramme'L %ii' Downstream in*estment 3y way of induction of forei2n e@uity in an eCistin2 Indian Com any to 3e duly su %iii' %i*' orted 3y a resolution of the 1oard of Directors as also a shareholders a2reement" if anyL Issue+transfer+ ricin2+*aluation of shares shall 3e in accordance with a lica3le (61I+81I 2uidelinesL For the ur ose of downstream in*estment" the Indian com anies makin2 the downstream in*estments would ha*e to 3rin2 in re@uisite funds from a3road and not le*era2e funds from the domestic market. This would" howe*er" not reclude downstream com anies" with o erations" from raisin2 de3t in the domestic market. Downstream in*estments throu2h internal accruals are ermissi3le" su3&ect to the ro*isions of ara2ra hs 5.1#.5 and 5.1#.$.1.

52

C,apter "( Calculation of Forei+n Investment


")1 Dotal Forei+n Investment i)e) Direct and Indirect Forei+n Investment in Indian Companies $.1.1 In*estment in Indian com anies can 3e made 3oth 3y non.resident as well as resident Indian entities. Any non.resident in*estment in an Indian com any is direct forei2n in*estment. In*estment 3y resident Indian entities could a2ain com rise of 3oth resident and non.resident in*estment. Thus" such an Indian com any would ha*e indirect forei2n in*estment if the Indian in*estin2 com any has forei2n in*estment in it. The indirect in*estment can also 3e a cascadin2 in*estment i.e. throu2h multi. layered structure. $.1.2 For the ur ose of com utation of indirect forei2n in*estment" forei2n in*estment in an Indian com any shall include all ty es of forei2n in*estments i.e. FDIL in*estment 3y FIIs %holdin2 as on 7arch 51'L FPIs %holdin2 as on 7arch 51'L FFIs %holdin2 as on 7arch 51'L ,8IsL AD8sL )D8sL Forei2n Currency Con*erti3le 1onds %FCC1'L fully" com ulsorily and mandatorily con*erti3le reference shares and fully" com ulsorily and mandatorily con*erti3le De3entures re2ardless of whether the said in*estments ha*e 3een made under (chedule 1" 2" 2A" 5" : and > of F67A %Transfer or Issue of (ecurity 3y Persons 8esident 0utside India' 8e2ulations" 2###. $.1.5 Guidelines for calculation of total forei+n investment i)e) direct and indirect forei+n investment in an Indian company) %i' Countin+ t,e Direct Forei+n Investment( All in*estment directly 3y a non. resident entity into the Indian com any would 3e counted towards forei2n in*estment. %ii' Countin+ of indirect forei+n Investment( %a' The forei2n in*estment throu2h the in*estin2 Indian com any would not 3e considered for calculation of the indirect forei2n in*estment in case of Indian com anies which are Gowned and controlledA 3y resident Indian citiKens and+or Indian Com anies which are owned and controlled 3y resident Indian citiKens . %3' For cases where condition %a' a3o*e is not satisfied or if the in*estin2 com any is owned or controlled 3y Gnon.resident entitiesA" the entire in*estment 3y the in*estin2 com any into the su3&ect Indian Com any would 3e considered as indirect forei2n in*estment" ro*ided that" as an eCce tion" the indirect forei2n in*estment in only the 1##R owned su3sidiaries of o eratin2.cum.in*estin2+in*estin2 com anies" will 3e 55

limited to the forei2n in*estment in the o eratin2.cum.in*estin2+ in*estin2 com any. This eCce tion is made since the downstream in*estment of a 1##R owned su3sidiary of the holdin2 com any is akin to in*estment made 3y the holdin2 com any and the downstream in*estment should 3e a mirror ima2e of the holdin2 com any. the downstream su3sidiary is owned 3y the holdin2 com any. Illustration To illustrate" if the indirect forei2n in*estment is 3ein2 calculated for Com any W which has in*estment throu2h an in*estin2 Com any E ha*in2 forei2n in*estment" the followin2 would 3e the method of calculation/ %A' %1' where Com any E has forei2n in*estment less than -#R. Com any W would not 3e taken as ha*in2 any indirect forei2n in*estment throu2h Com any E. where Com any E has forei2n in*estment of say !-R and/ %I' %II' %III' in*ests 2:R in Com any W" the entire 2:R in*estment 3y Com any E would 3e treated as indirect forei2n in*estment in Com any WL in*ests >#R in Com any W" the indirect forei2n in*estment in Com any W would 3e taken as >#RL where Com any W is a wholly owned su3sidiary of Com any E %i.e. Com any E owns 1##R shares of Com any W'" then only !-R would 3e treated as indirect forei2n e@uity and the 3alance 2-R would 3e treated as resident held e@uity. The indirect forei2n e@uity in Com any W would 3e com uted in the ratio of !-/2- in the total in*estment of Com any E in Com any W. %iii' %i*' %*' The total forei2n in*estment would 3e the sum total of direct and indirect forei2n in*estment. The a3o*e methodolo2y of calculation would a Additional conditions( %a' The full details a3out the forei2n in*estment includin2 ownershi details etc. in Indian com any%s' and information a3out the control of the com any%s' would 3e furnished 3y the Com any%s' to the )o*ernment of India at the time of seekin2 a %3' ro*al. ro*al is re@uired for forei2n ointment of the 5$ In any sector+acti*ity" where )o*ernment a ly at e*ery sta2e of in*estment in Indian com anies and thus to each and e*ery Indian com any. This eCce tion" howe*er" is strictly for those cases where the entire ca ital of

in*estment and in cases where there are any inter-se a2reements 3etween+amon2st shareholders which ha*e an effect on the a

1oard of Directors or on the eCercise of *otin2 ri2hts or of creatin2 *otin2 ri2hts dis ro ortionate to shareholdin2 or any incidental matter thereof" such a2reements will ha*e to 3e informed to the a control when considerin2 the case for a %c' ro*in2 authority. The a ro*in2 authority will consider such inter-se a2reements for determinin2 ownershi and ro*al of forei2n in*estment. In all sectors attractin2 sectoral ca s" the 3alance e@uity i.e. 3eyond the sectoral forei2n in*estment ca " would s ecifically 3e 3eneficially owned 3y+held with+in the hands of resident Indian citiKens and Indian com anies" owned and controlled 3y resident Indian citiKens. %d' In the IB 1 and Defence sectors where the sectoral ca is less than $=R" the com any would need to 3e Gowned and controlledA 3y resident Indian citiKens and Indian com anies" which are owned and controlled 3y resident Indian citiKens. %A' For this ur ose" the e@uity held 3y the lar2est Indian shareholder would ha*e to 3e at least -1R of the total e@uity" eCcludin2 the e@uity held 3y Pu3lic (ector 1anks and Pu3lic Financial Institutions" as defined in (ection $A of the Com anies Act" 1=-:. The term Glar2est Indian shareholderA" used in this clause" will include any or a com3ination of the followin2/ %I' In the case of an indi*idual shareholder" %aa' %33' %cc' The indi*idual shareholder" A relati*e of the shareholder within the meanin2 of (ection : of the Com anies Act" 1=-:. A com any+2rou of com anies in which the indi*idual shareholder+9JF to which he 3elon2s has mana2ement and controllin2 interest. %II' In the case of an Indian com any" %aa' %33' %1' The Indian com any A 2rou of Indian com anies under the same mana2ement and ownershi control. For the ur ose of this Clause" Indian com any shall 3e a com any which must ha*e a resident Indian or a relati*e as defined under (ection : of the Com anies Act" 1=-:+ 9JF" either sin2ly or in com3ination holdin2 at least -1R of the shares.

%C'

Pro*ided that" in case of a com3ination of all or any of the entities mentioned in (u3.Clauses %I' and %II' of clause $.1.5%*'%d'%A' a3o*e" each of the arties shall ha*e entered into a le2ally 3indin2 a2reement to act as a sin2le unit in mana2in2 the matters of the a licant com any.

%e'

If a declaration is made 3y

ersons as

er section 1>!C of the Indian

Com anies Act a3out a 3eneficial interest 3ein2 held 3y a non.resident entity" then e*en thou2h the in*estment may 3e made 3y a resident Indian citiKen" the same shall 3e counted as forei2n in*estment. $.1.$ The a3o*e mentioned olicy and methodolo2y would 3e a lica3le for determinin2 the total forei2n in*estment in all sectors" eCce t in sectors where it is s ecified in a statute or rule there under. The a3o*e methodolo2y of determinin2 direct and indirect forei2n in*estment therefore does not a ly to the Insurance (ector which will continue to 3e 2o*erned 3y the rele*ant 8e2ulation. $.1.- Any forei2n in*estment already made in accordance with the 2uidelines in eCistence rior to Fe3ruary 15" 2##= %date of issue of Press ,ote 2 of 2##=' would not re@uire any modification to conform to these 2uidelines. All other in*estments" ast and future" would come under the am3it of these new 2uidelines.

C,apter /( Forei+n Investment Promotion 2oard (FIP2#


/)1 -.1.1 Constitution of FIP2 FIP1 com rises of the followin2 (ecretaries to the )o*ernment of India/ %i' (ecretary to )o*ernment" De artment of 6conomic Affairs" 7inistry of Finance V Chair erson %ii' %iii' %i*' %*' -.1.2 (ecretary to )o*ernment" De artment of Industrial Policy B Promotion" 7inistry of Commerce B Industry (ecretary to )o*ernment" De artment of Commerce" 7inistry of Commerce B Industry (ecretary to )o*ernment" 6conomic 8elations" 7inistry of 6Cternal Affairs (ecretary to )o*ernment" 7inistry of 0*erseas Indian Affairs. rofessional eC erts of Industry and The 1oard would 3e a3le to co.o t other (ecretaries to the Central )o*ernment and to officials of financial institutions" 3anks and Commerce" as and when necessary. /) -.2.1 @evels of Approvals for Cases under Government 6oute The 7inister of Finance who is in.char2e of FIP1 would consider the recommendations of FIP1 on ro osals with total forei2n e@uity inflow of and 3elow 8s.12## crore. -.2.2 The recommendations of FIP1 on ro osals with total forei2n e@uity inflow of more than 8s. 12## crore would 3e 6conomic Affairs %CC6A'. -.2.5 /)1 -.5.1 The CC6A would also consider the ro osals which may 3e referred to it 3y the FIP1+the 7inister of Finance %in.char2e of FIP1'. Cases E,ic, do not 6eGuire Fres, Approval Com anies may not re@uire fresh rior a entity" in the followin2 cases/ %i' 6ntities the acti*ities of which had earlier re@uired rior a ro*al of ro*al FIP1+CCFI+CC6A and which had" accordin2ly" earlier o3tained rior a acti*ities+sectors ha*e 3een laced under automatic routeL %ii' 6ntities the acti*ities of which had sectoral ca s earlier and which had" accordin2ly" earlier o3tained rior a ro*al of FIP1+CCFI+CC6A for their initial forei2n in*estment 3ut su3se@uently such ca s were remo*ed+increased ro*al of the )o*ernment i.e. 7inister in. char2e of FIP1+CC6A for 3rin2in2 in additional forei2n in*estment into the same laced for consideration of Ca3inet Committee on

of FIP1+CCFI+CC6A for their initial forei2n in*estment 3ut su3se@uently such

and the acti*ities the sectoral ca sL and %iii'

laced under the automatic routeL

ro*ided that such

additional in*estment alon2 with the initial+ori2inal in*estment does not eCceed Additional forei2n in*estment into the same entity where rior a ro*al of

FIP1+CCFI+CC6A had 3een o3tained earlier for the initial+ori2inal forei2n in*estment due to re@uirements of Press ,ote 1>+1==> or Press ,ote 1 of 2##and rior a /)" -.$.1 ro*al of the )o*ernment under the FDI olicy is not re@uired for any other reason+ ur ose. .nline Filin+ of Applications for FIP2HGovernment:s Approval )uidelines for e.filin2 of a %htt /++www.fi 3india.com'. lications" filin2 of amendment a lications and instructions to a licants are a*aila3le at FIP1As we3site %htt /++finmin.nic.in+' and

C,apter 0( %ector %pecific Conditions on FDI


0)1 Pro,i&ited %ectors( FDI is rohi3ited in/ %a' %3' %c' %d' %e' %f' %2' %h' ?ottery 1usiness includin2 )o*ernment+ ri*ate lottery" online lotteries" etc. )am3lin2 and 1ettin2 includin2 casinos etc. Chit funds ,idhi com any Tradin2 in Transfera3le De*elo ment 8i2hts %TD8s' 8eal 6state 1usiness or Construction of Farm 9ouses 7anufacturin2 of ci2ars" cheroots" ci2arillos and ci2arettes" of to3acco or of to3acco su3stitutes Acti*ities+sectors not o en to ri*ate sector in*estment e.2. Atomic 6ner2y and 8ailway Trans ort %other than 7ass 8a id Trans ort (ystems'. Forei+n tec,nolo+y colla&oration in any form includin2 licensin2 for franchise" trademark" 3rand name" mana2ement contract is also rohi3ited for ?ottery 1usiness and )am3lin2 and 1ettin2 acti*ities. 0) Permitted %ectors In the followin2 sectors+acti*ities" FDI u to the limit indicated a2ainst each other

sector+acti*ity is allowed" su3&ect to a lica3le laws+re2ulationsL security and the automatic route" su3&ect to a conditionalities.

conditionalities. In sectors+acti*ities not listed 3elow" FDI is ermitted u to 1##R on lica3le laws+re2ulationsL security and other

;here*er there is a re@uirement of minimum ca italiKation" it shall include share remium recei*ed alon2 with the face *alue of the share" only when it is recei*ed 3y the com any u on issue of the shares to the non.resident in*estor. Amount aid 3y the transferee durin2 ost.issue transfer of shares 3eyond the issue rice of the share" cannot 3e taken into account while calculatin2 minimum ca italiKation re@uirement.

%l) 4o)

%ectorHActivity

J of Entry 6oute EGuityH FDI Cap 1##R Automatic

A+riculture 0) )1 A+riculture $ Animal =us&andry a' Floriculture" 9orticulture" A iculture and Culti*ation of He2eta3les B 7ushrooms under controlled conditionsL 3' c' De*elo ment and Production of seeds and lantin2 materialL Animal 9us3andry %includin2 3reedin2 of do2s'" Pisciculture" A@uaculture" under controlled conditionsL and d' (er*ices related to a2ro and allied sectors 4ote( 2esides t,e a&ove, FDI is not allo<ed :.2.1.1 in any ot,er a+ricultural sectorHactivity

.t,er Conditions/ I. For com anies dealin2 with de*elo ment of trans2enic seeds+*e2eta3les" the followin2 conditions a ly/ lantin2 material the %i' ;hen dealin2 with 2enetically modified seeds or

com any shall com ly with safety re@uirements in accordance with laws enacted under the 6n*ironment %Protection' Act on the 2enetically modified or2anisms. %ii' Any im ort of 2enetically modified materials if re@uired shall 3e su3&ect to the conditions laid down *ide ,otifications issued under Forei2n Trade %De*elo ment and 8e2ulation' Act" 1==2. %iii' The com any shall com ly with any other ?aw" 8e2ulation or Policy 2o*ernin2 2enetically modified material in force from time to time. %i*'Jndertakin2 of 3usiness acti*ities in*ol*in2 the use of 2enetically en2ineered cells and material shall 3e su3&ect to the recei t of a from )enetic 6n2ineerin2 A Committee on )enetic 7ani ulation %8C)7'. %*' Im ort of materials shall 3e in accordance with ,ational (eeds Policy. $# ro*als ro*al Committee %)6AC' and 8e*iew

%l) 4o)

%ectorHActivity II.

J of Entry 6oute EGuityH FDI Cap The term under controlled conditions co*ers the followin2/ %i' GCulti*ation under controlled conditionsA for the cate2ories of floriculture" horticulture" culti*ation of *e2eta3les and mushrooms is the ractice of culti*ation wherein rainfall" tem erature" solar radiation" air humidity and culture medium are controlled artificially. Control in these arameters may 3e effected throu2h rotected culti*ation under 2reen houses" net houses" facilities where anthro o2enically. %ii' In case of Animal 9us3andry" sco e of the term Gunder controlled conditionsA co*ers V %a' 8earin2 of animals under intensi*e farmin2 systems with stall. feedin2. Intensi*e farmin2 system will re@uire climate systems %*entilation" tem erature+humidity mana2ement'" health care and nutrition" herd re2isterin2+ edi2ree recordin2" use of machinery" waste mana2ement systems as rescri3ed 3y the ,ational ?i*estock Policy" 2#15 and in conformity with the eCistin2 G(tandard 0 eratin2 Practices and 7inimum (tandard Protocol.A %3' Poultry 3reedin2 farms and hatcheries where micro.climate is controlled throu2h ad*anced technolo2ies like incu3ators" *entilation systems etc. %iii'In the case of isciculture and a@uaculture" sco e of the term Gunder controlled conditionsA co*ers V %a' A@uariums %3' 9atcheries where e22s are artificially fertiliKed and fry are hatched and incu3ated in an enclosed en*ironment with artificial climate control. %i*' In the case of a iculture" sco e of the term Gunder controlled conditionsA co*ers V %a' Production of honey 3y 3ee.kee in2" eCce t in forest+wild" in desi2nated s aces with control of tem eratures and climatic factors like humidity and artificial feedin2 durin2 lean seasons. $1 oly houses or any other im ro*ed infrastructure micro.climatic conditions are re2ulated

%l) 4o) 0) ) :.2.2.1

%ectorHActivity Dea Plantation Tea sector includin2 tea lantations

J of Entry 6oute EGuityH FDI Cap 1##R )o*ernment

4ote( 1esides the a3o*e" FDI is not allowed in any other lantation sector+acti*ity. :.2.2.2 .t,er Condition/ Prior a ro*al of the (tate )o*ernment concerned is re@uired in case of any future land use chan2e. Minin+ and Petroleum $ 4atural Gas 0) )1 :.2.5.1 Minin+ Minin+ and E*ploration of metal and 1##R non-metal ores includin2 diamond" 2old" sil*er and su&'ect to recious ores 3ut eCcludin2 and its oresL and 7inerals the 7ines titanium 3earin2 minerals Automatic

%De*elo ment B 8e2ulation' Act" 1=-!. :.2.5.2 Coal and @i+nite %1' Coal B ?i2nite minin2 for ca ti*e 1##R consum tion 3y ower ro&ects" iron B steel and cement units and other eli2i3le acti*ities ermitted under and su&'ect to the ro*isions of Coal 7ines %,ationaliKation' Act" 1=!5. %2' (ettin2 u coal rocessin2 lants like 1##R Automatic

Automatic

washeries su&'ect to the condition that the com any shall not do coal minin2 and shall not sell washed coal or siKed coal from its coal rocessin2 lants in the o en market and shall su washed or siKed coal to those who are su ly the arties

lyin2 raw coal to coal

rocessin2 lants for washin2 or siKin2.

$2

%l) 4o) :.2.5.5 :.2.5.5.1

%ectorHActivity

J of Entry 6oute EGuityH FDI Cap Minin+ and mineral separation of titanium &earin+ minerals and ores, its value addition and inte+rated activities 7inin2 and mineral se aration of titanium 1##R 3earin2 minerals B ores" its *alue addition and inte2rated acti*ities su&'ect to sectoral re2ulations and the 7ines and 7inerals %De*elo ment and 8e2ulation Act 1=-!'. )o*ernment

:.2.5.5.2

.t,er Conditions/ India has lar2e reser*es of 3each sand minerals in the coastal stretches around the country. Titanium 3earin2 minerals *iK. Ilmenite" rutile and leucoCene" and Sirconium 3earin2 minerals includin2 Kircon are some of the 3each sand minerals which ha*e 3een classified as rescri3ed su3stances under the Atomic 6ner2y Act" 1=:2. Jnder the Industrial Policy (tatement 1==1" minin2 and roduction of minerals classified as rescri3ed su3stances and s ecified in the (chedule to the Atomic 6ner2y %Control of Production and Jse' 0rder" 1=-5 were included in the list of industries reser*ed for the u3lic sector. Hide 8esolution ,o. >+1%1'+=!. P(J+1$22" dated : 0cto3er 1==>" issued 3y the De artment of Atomic 6ner2y" layin2 down the olicy for eC loitation of 3each sand minerals" ri*ate artici ation includin2 Forei2n Direct In*estment %FDI' was ermitted in minin2 and roduction of Titanium ores %Ilmenite" 8utile and ?eucoCene' and Sirconium minerals %Sircon'. Hide ,otification ,o. (.0.:1%6'" dated 1>.1.2##:" the De artment of Atomic 6ner2y re.notified the list of rescri3ed su3stances under the Atomic 6ner2y Act 1=:2. Titanium 3earin2 ores and concentrates %Ilmenite" 8utile and ?eucoCene' and Sirconium" its alloys and com ounds and minerals+concentrates includin2 Sircon" were remo*ed from the list of rescri3ed su3stances. %i' FDI for se aration of titanium 3earin2 minerals B ores will 3e su3&ect to the followin2 additional conditions *iK./ %A' *alue addition facilities are set u technolo2yL %1' dis osal of tailin2s durin2 the mineral se aration shall 3e carried out in accordance with re2ulations framed 3y the Atomic 6ner2y 8e2ulatory 1oard such as Atomic 6ner2y %8adiation Protection' 8ules" 2##$ and the $5 within India alon2 with transfer of
th

%l) 4o)

%ectorHActivity

J of Entry 6oute EGuityH FDI Cap Atomic 6ner2y %(afe Dis osal of 8adioacti*e ;astes' 8ules" 1=>!.

%ii' FDI will not 3e allowed in minin2 of rescri3ed su3stances listed in the ,otification ,o. (.0. :1%6'" dated 1>.1.2##:" issued 3y the De artment of Atomic 6ner2y. Clarification/ %1' For titanium 3earin2 ores such as Ilmenite" ?eucoCene and 8utile" manufacture of titanium dioCide i2ment and titanium s on2e constitutes *alue addition. Ilmenite can 3e rocessed to roduce 4(ynthetic 8utile or Titanium (la2 as an intermediate *alue added roduct. %2' The o3&ecti*e is to ensure that the raw material a*aila3le in the country is utiliKed for settin2 u downstream industries and the technolo2y a*aila3le internationally is also made a*aila3le for settin2 u such industries within the country. Thus" if with the technolo2y transfer" the o3&ecti*e of the FDI Policy can 3e achie*ed" the conditions rescri3ed at %i' %A' a3o*e shall 3e deemed to 3e fulfilled. 0) )" :.2.$.1 Petroleum $ 4atural Gas 6C loration acti*ities of oil and natural 1##R 2as fields" infrastructure etroleum related to marketin2 of etroleum i elines" roducts and roduct ?,) market Automatic

natural 2as" marketin2 of natural 2as and roducts" natural etroleum 2as+ i elines"

8e2asification infrastructure"

study and formulation and Petroleum refinin2 in the ri*ate sector" su&'ect to the eCistin2 sectoral olicy and re2ulatory framework in the oil marketin2 sector and the olicy of the )o*ernment on ri*ate artici ation in eC loration of oil and the disco*ered com anies. fields of national oil

$$

%l) 4o) :.2.$.2

%ectorHActivity

J of Entry 6oute EGuityH FDI Cap Automatic Petroleum refinin2 3y the Pu3lic (ector $=R Jndertakin2s %P(J'" without any disin*estment or dilution of domestic e@uity in the eCistin2 P(Js.

Manufacturin+
0) )/ :.2.-.1 Manufacture of items reserved for production in Micro and %mall Enterprises (M%Es# FDI in 7(6s %as defined under 7icro" (mall And 7edium 6nter rises De*elo ment Act" 2##: %7(76D" Act 2##:'' will 3e su3&ect to the sectoral ca s" entry routes and other rele*ant sectoral re2ulations. Any industrial undertakin2 which is not a 7icro or (mall (cale 6nter rise" 3ut manufactures items reser*ed for the 7(6 sector would re@uire )o*ernment route where forei2n in*estment is more than 2$R in the ca ital. (uch an undertakin2 would also re@uire an Industrial ?icense under the Industries %De*elo ment B 8e2ulation' Act" 1=-1" for such manufacture. The issue of Industrial ?icense is su3&ect to a few 2eneral conditions and the s ecific condition that the Industrial Jndertakin2 shall undertake to eC ort a minimum of -#R of the new or additional annual roduction of the 7(6 reser*ed items to 3e achie*ed within a maCimum eriod of three years. The eC ort o3li2ation would 3e a lica3le from the date of commencement of commercial roduction and in accordance with the ro*isions of section 11 of the Industries %De*elo ment B 8e2ulation' Act" 1=-1. 0) )0 :.2.:.1 Defence Defence Industry su3&ect 2:R to under Industrial the license Industries B )o*ernment route u to 2:R A3o*e 2:R to Ca3inet Committee on (ecurity %CC(' on case to case 3asis" where*er it is likely to result in access to modern and Gstate. of.artA technolo2y in the country. ortfolio

%De*elo ment 8e2ulation' Act" 1=-1

4ote/ %i' In*estment 3y Forei2n Portfolio In*estors FPIs+FIIs%throu2h in*estment' is not ermitted. %ii' FPI+FII%throu2h remain ca

ortfolio in*estment' in com anies holdin2 defence

licence as on 22 Au2ust" 2#15 %date of issue of Press ,ote : of 2#15' will ed at the le*el eCistin2 as on the said date. ,o fresh ortfolio in*estment' is ermitted e*en if the le*el of ed le*el su3se@uently. $FPI+FII%throu2h

such in*estment falls 3elow the ca

%l) 4o) :.2.:.2

%ectorHActivity

J of Entry 6oute EGuityH FDI Cap

.t,er Conditions/ %i' ?icence a lications will 3e considered and licences 2i*en 3y the De artment of Industrial Policy B Promotion" 7inistry of Commerce B Industry" in consultation with 7inistry of Defence. %ii' The a licant should 3e an Indian com any+ artnershi firm. %iii' The mana2ement of the a licant com any+ artnershi should 3e in Indian hands with ma&ority re resentation on the 1oard as well as the Chief 6Cecuti*es of the com any+ artnershi firm 3ein2 resident Indians. %i*' Full articulars of the Directors and the Chief 6Cecuti*es should 3e furnished alon2 with the a lications. %*' The )o*ernment reser*es the ri2ht to *erify the antecedents of the forei2n colla3orators and domestic romoters includin2 their financial standin2 and credentials in the world market. Preference would 3e 2i*en to ori2inal e@ui ment manufacturers or desi2n esta3lishments" and com anies ha*in2 a 2ood track record of ast su lies to Armed Forces" ( ace and Atomic ro er ener2y sections and ha*in2 an esta3lished 8 B D 3ase. %*i' There would 3e no minimum ca italiKation for the FDI. A assessment" howe*er" needs to 3e done 3y the mana2ement of the a licant com any de endin2 u on the roduct and the technolo2y. The licensin2 authority would satisfy itself a3out the ade@uacy of the net worth of the non.resident in*estor takin2 into account the cate2ory of wea ons and e@ui ment that are ro osed to 3e manufactured. %*ii' There would 3e a three.year lock.in eriod for transfer of e@uity from one non.resident in*estor to another non.resident in*estor %includin2 ,8Is B erstwhile 0C1s with :#R or more ,8I stake' and such transfer would 3e su3&ect to rior a ro*al of the )o*ernment. %*iii' The 7inistry of Defence is not in a osition to 2i*e urchase 2uarantee for roducts to 3e manufactured. 9owe*er" the lanned ac@uisition ro2ramme for such e@ui ment and o*erall re@uirements would 3e made a*aila3le to the eCtent ossi3le. %iC' The ca acity norms for roduction will 3e ro*ided in the licence 3ased on the a lication as well as the recommendations of the 7inistry of Defence" which will look into eCistin2 ca acities of similar and allied roducts. $:

%l) 4o)

%ectorHActivity %C'

J of Entry 6oute EGuityH FDI Cap Im ort of e@ui ment for re. roduction acti*ity includin2 de*elo ment of rototy e 3y the a licant com any would 3e ermitted.

%Ci' Ade@uate safety and security rocedures would need to 3e ut in lace 3y the licensee once the licence is 2ranted and roduction commences. These would 3e su3&ect to *erification 3y authoriKed )o*ernment a2encies. %Cii' The standards and testin2 rocedures for e@ui ment to 3e roduced under licence from forei2n colla3orators or from indi2enous 8 B D will ha*e to 3e ro*ided 3y the licensee to the )o*ernment nominated @uality ro riate confidentiality clause. The nominated assurance a2ency under a

@uality assurance a2ency would ins ect the finished roduct and would conduct sur*eillance and audit of the Fuality Assurance Procedures of the licensee. (elf.certification would 3e ermitted 3y the 7inistry of Defence on case to case 3asis" which may in*ol*e either indi*idual items" or 2rou of items manufactured 3y the licensee. (uch ermission would 3e for a fiCed eriod and su3&ect to renewals. %Ciii' Purchase reference and (ector or2aniKations as 6nter rises. %Ci*' Arms and ammunition roduced 3y the ri*ate manufacturers will 3e rimarily sold to the 7inistry of Defence. These items may also 3e sold to other )o*ernment entities under the control of the 7inistry of 9ome Affairs and (tate )o*ernments with the rior a ro*al of the 7inistry of Defence. ,o such item should 3e sold within the country to any other erson or entity. The eC ort of manufactured items would 3e su3&ect to olicy and 2uidelines as a lica3le to 0rdnance Factories and Defence Pu3lic (ector Jndertakin2s. ,on.lethal items would 3e ermitted for sale to ersons+entities other than the Central of (tate )o*ernments with the rior a ro*al of the 7inistry of Defence. ?icensee would also need to institute a *erifia3le system of remo*al of all 2oods out of their factories. Hiolation of these ro*isions may lead to cancellation of the licence. %C*' All a lications seekin2 ermission of the )o*ernment for FDI in defence would 3e made to the (ecretariat of Forei2n In*estment Promotion 1oard %FIP1' in the De artment of 6conomic Affairs. $! rice reference may 3e 2i*en to the Pu3lic er 2uidelines of the De artment of Pu3lic

%l) 4o)

%ectorHActivity %C*i' A

J of Entry 6oute EGuityH FDI Cap lications for FDI u to 2:R will follow the eCistin2 rocedure with ro*ed 3y lications seekin2

ro osals in*ol*in2 inflows in eCcess of 8s. 12## crore 3ein2 a Ca3inet Committee on 6conomic Affairs %CC6A'. A

ermission of the )o*ernment for FDI 3eyond 2:R" will in all cases 3e eCamined additionally 3y the De artment of Defence Production %DoDP' from the oint of *iew articularly of access to modern and Gstate.of.artA technolo2y. %C*ii' 1ased on the recommendation of the DoDP and FIP1" a ro*al of the Ca3inet Committee on (ecurity %CC(' will 3e sou2ht 3y the DoDP in res ect of cases which are likely to result in access to modern and Gstate.of. artA technolo2y in the country. %C*iii' Pro osals for FDI 3eyond 2:R with ro osed inflow in eCcess of 8s. 12## crores" which are to 3e a %CiC' )o*ernment decision on a ro*ed 3y CC( will not re@uire further a ro*al of the Ca3inet Committee on 6conomic Affairs %CC6A'. lications to FIP1 for FDI in defence industry sector will 3e normally communicated within a time frame of 1# weeks from the date of acknowled2ement.

%ervices %ector
Information %ervices
0) )7 :.2.!.1 :.2.!.1.1 2roadcastin+ 2roadcastin+ Carria+e %ervices %1' Deleports %settin2 u of u .linkin2 !$R 9J1s+Tele orts'L %2' Direct to =ome %DT9'L %5' Ca&le 4et<or9s %7(0s' %7ulti (ystem at of o erators and o eratin2 u 2radation Automatic u to $=R )o*ernment route 3eyond $=R and u to !$R

,ational or (tate or District le*el undertakin2 networks towards di2italiKation and addressa3ility'L %$' Mo&ile D7K %-' =eadend-in-t,e %9y 2roadcastin+ %ervice%9IT(' $>

%l) 4o) :.2.!.1.2

%ectorHActivity Ca&le 4et<or9s %0ther 7(0s of

J of Entry 6oute EGuityH FDI Cap Automatic not $=R

undertakin2

u 2radation

networks

towards di2italiKation and addressa3ility and ?ocal Ca3le 0 erators %?C0s'' :.2.!.2 :.2.!.2.1 2roadcastin+ Content %ervices Derrestrial 2roadcastin+ FM 6adio#, 3y su3&ect to of such terms

(FM 2:R and B

)o*ernment

conditions" as s ecified from time to time" 7inistry Information 1roadcastin2" for 2rant of ermission for settin2 u of F7 8adio stations :.2.!.2.2 :.2.!.2.5 >p-lin9in+ of 84e<s $ Current Affairs: 2:R D7 C,annels >p-lin9in+ of 4on-84e<s $ Current 1##R Affairs: D7 C,annelsH Do<n-lin9in+ of D7 C,annels :.2.!.5 FDI for J .linkin2+Down.linkin2 TH Channels will 3e su3&ect to com liance with the rele*ant J .linkin2+Down.linkin2 Policy notified 3y the 7inistry of Information B 1roadcastin2 from time to time. :.2.!.$ Forei2n in*estment %FI' in com anies en2a2ed in all the aforestated ser*ices will 3e su3&ect to rele*ant re2ulations and such terms and conditions" as may 3e s ecified from time to time" 3y the 7inistry of Information and 1roadcastin2. :.2.!.The forei2n in*estment %FI' limit in com anies en2a2ed in the aforestated acti*ities shall include" in addition to FDI" in*estment 3y Forei2n Institutional In*estors %FIIs'" Forei2n Portfolio In*estors %FPIs'" Fualified Forei2n In*estors%FFIs'" ,on. 8esident Indians %,8Is'" Forei2n Currency Con*erti3le 1onds %FCC1s'" American De ository 8ecei ts %AD8s'" )lo3al De ository 8ecei ts %)D8s' and con*erti3le reference shares held 3y forei2n entities. :.2.!.: Forei2n in*estment in the aforestated 3roadcastin2 carria2e ser*ices will 3e su3&ect to the followin2 security conditions+terms/ $= )o*ernment )o*ernment

%l) 4o)

%ectorHActivity

J of Entry 6oute EGuityH FDI Cap Mandatory 6eGuirement for Ley E*ecutives of t,e Company %i' %ii' The ma&ority of Directors on the 1oard of the Com any shall 3e Indian citiKens. The Chief 6Cecuti*e 0fficer %C60'" Chief 0fficer in.char2e of technical network o erations and Chief (ecurity 0fficer should 3e resident Indian citiKens. %ecurity Clearance of Personnel %iii' The Com any" all Directors on the 1oard of Directors and such key eCecuti*es like 7ana2in2 Director+Chief 6Cecuti*e 0fficer" Chief Financial 0fficer %CF0'" Chief (ecurity 0fficer %C(0'" Chief Technical 0fficer %CT0'" Chief 0 eratin2 0fficer %C00'" shareholders who indi*idually hold 1#R or more aid.u ca ital in the com any and any other cate2ory" as may 3e s ecified 3y the 7inistry of Information and 1roadcastin2 from time to time" shall re@uire to 3e security cleared. In case of the a ointment of Directors on the 1oard of the Com any and such key eCecuti*es like 7ana2in2 Director+Chief 6Cecuti*e 0fficer" Chief Financial 0fficer %CF0'" Chief (ecurity 0fficer %C(0'" Chief Technical 0fficer %CT0'" Chief 0 eratin2 0fficer %C00'" etc." as may 3e s ecified 3y the 7inistry of Information and 1roadcastin2 from time to time" o3tained. It shall 3e o3li2atory on the art of the com any to also take rior ermission from the 7inistry of Information and 1roadcastin2 3efore effectin2 any chan2e in the 1oard of Directors. %i*' The Com any shall 3e re@uired to o3tain security clearance of all forei2n ersonnel likely to 3e de loyed for more than :# days in a year 3y way of a ointment" contract" and consultancy or in any other ca acity for rior to their installation" maintenance" o eration or any other ser*ices two years. Permission vis--vis %ecurity Clearance %*' The ermission shall 3e su3&ect to ermission holder+licensee remainin2 -# security cleared throu2hout the currency of ermission. In case the security rior ermission of the 7inistry of Information and 1roadcastin2 shall ha*e to 3e

de loyment. The security clearance shall 3e re@uired to 3e o3tained e*ery

%l) 4o)

%ectorHActivity

J of Entry 6oute EGuityH FDI Cap clearance is withdrawn" the ermission 2ranted is lia3le to 3e terminated forthwith.

%*i'

In the e*ent of security clearance of any of the ersons associated with the ermission holder+licensee or forei2n ersonnel 3ein2 denied or withdrawn for any reasons whatsoe*er" the ermission holder+licensee will ensure that the concerned erson resi2ns or his ser*ices terminated forthwith after recei*in2 such directi*es from the )o*ernment" failin2 which the ermission+license 2ranted shall 3e re*oked and the com any shall 3e dis@ualified to hold any such Permission+license in future for a eriod of fi*e years.

InfrastructureH4et<or9H%oft<are related reGuirement %*ii' %*iii' The officers+officials of the licensee com anies dealin2 with the lawful interce tion of ser*ices will 3e resident India citiKens. Details of infrastructure+network dia2ram %technical details of the network' could su 3e ro*ided" on a need 3asis only" to e@ui ment liers+manufactures and the affiliate of the licensee com any. Clearance

from the licensor would 3e re@uired if such information is to 3e ro*ided to any3ody else. %iC' %C' %Ci' The Com any shall not transfer the su3scri3ersA data3ases to any erson+ lace outside India unless ermitted 3y rele*ant law. The Com any must ro*ide tracea3le identity of their su3scri3ers. The Com any should ensure that necessary ro*ision %hardware+software' is a*aila3le in their e@ui ment for doin2 the lawful interce tion and monitorin2 from a centraliKed location as and when re@uired 3y )o*ernment. %Cii' The com any" at its own costs" shall" on demand 3y the 2o*ernment or its authoriKed re resentati*e" facilities at desi2nated authoriKed re resentati*e. %Ciii' The )o*ernment of India" 7inistry of Information B 1roadcastin2 or its authoriKed re resentati*e shall ha*e the ri2ht to ins ect the 3roadcastin2 facilities. ,o rior ermission+intimation shall 3e re@uired to eCercise the -1 ro*ide the necessary e@ui ment" ser*ices and lace%s' for continuous monitorin2 or the Monitorin+, Inspection and %u&mission of Information

3roadcastin2 ser*ice 3y or under su er*ision of the )o*ernment or its

%l) 4o)

%ectorHActivity

J of Entry 6oute EGuityH FDI Cap ri2ht of )o*ernment or its authoriKed re resentati*e to carry out the ins ection. The com any will" if re@uired 3y the )o*ernment or its authoriKed re resentati*e" monitorin2 for any ro*ide necessary facilities for continuous articular as ect of the com anyAs acti*ities and

o erations. Continuous monitorin2" howe*er" will 3e confined only to security related as ects" includin2 screenin2 of o3&ectiona3le content. %Ci*' The ins ection will ordinarily 3e carried out 3y the )o*ernment of India" 7inistry of Information B 1roadcastin2 or its authoriKed re resentati*e after reasona3le notice" eCce t in circumstances where 2i*in2 such a notice will defeat the *ery ur ose of the ins ection. %C*' The com any shall su3mit such information with res ect to its ser*ices as may 3e re@uired 3y the )o*ernment or its authoriKed re resentati*e" in the format as may 3e re@uired" from time to time. %C*i' The ermission holder+licensee shall 3e lia3le to furnish the )o*ernment of India or its authoriKed re resentati*e or T8AI or its authoriKed re resentati*e" such re orts" accounts" estimates" returns or such other rele*ant information and at such eriodic inter*als or such times as may 3e re@uired. %C*ii' The ser*ice ro*iders should familiariKe+train desi2nated officials or the )o*ernment or officials of T8AI or its authoriKed re resentati*e%s' in res ect of rele*ant o erations+features of their systems. 4ational %ecurity Conditions %C*iii' It shall 3e o en to the licensor to restrict the ?icensee Com any from o eratin2 in any sensiti*e area from the ,ational (ecurity an2le. The )o*ernment of India" 7inistry of Information and 1roadcastin2 shall ha*e the ri2ht to tem orarily sus end the ermission of the ermission holder+?icensee in u3lic interest or for national security for such eriod or eriods as it may direct. The com any shall immediately com ly with any directi*es issued in this re2ard failin2 which the ermission issued shall 3e re*oked and the com any dis@ualified to hold any such ermission in future for a eriod of fi*e years. %CiC' The com any shall not im ort or utiliKe any e@ui ment" which are identified -2

%l) 4o)

%ectorHActivity

J of Entry 6oute EGuityH FDI Cap as unlawful and+or render network security *ulnera3le.

.t,er Conditions %CC' ?icensor reser*es the ri2ht to modify these conditions or incor orate new conditions considered necessary in the interest of national security and u3lic interest or for ro er ro*ision of 3roadcastin2 ser*ices. %CCi' ?icensee will ensure that 3roadcastin2 ser*ice installation carried out 3y it should not 3ecome a safety haKard and is not in contra*ention of any statute" rule or re2ulation and u3lic olicy. 0) )5 :.2.>.1 Print Media Pu3lishin2 of news a er and eriodicals 2:R dealin2 with news and current affairs :.2.>.2 %FDI and )o*ernment 3y and )o*ernment 3y

in*estment ,8Is+PI0s+FII+FPI' %FDI

Pu3lication of Indian editions of forei2n 2:R affairs

ma2aKines dealin2 with news and current in*estment ,8Is+PI0s+FII+FPI' :.2.>.2.1

.t,er Conditions( %i' G7a2aKineA" for the ur ose of these 2uidelines" will 3e defined as a eriodical u3lication" 3rou2ht out on non.daily 3asis" containin2 u3lic news or comments on u3lic news. %ii' Forei2n in*estment would also 3e su3&ect to the )uidelines for Pu3lication of Indian editions of forei2n ma2aKines dealin2 with news and current affairs issued 3y the 7inistry of Information B 1roadcastin2 on $.12.2##>.

:.2.>.5

Pu3lishin2+ rintin2 technical

of

scientific

and 1##R

)o*ernment

ma2aKines+s ecialty

&ournals+

eriodicals" su&'ect to com liance with the le2al framework as a lica3le and 2uidelines issued in this re2ard from time to time 3y 7inistry of Information and 1roadcastin2.

:.2.>.$

Pu3lication of facsimile edition of forei2n 1##R news a ers

)o*ernment

-5

%l) 4o) :.2.>.$.1

%ectorHActivity

J of Entry 6oute EGuityH FDI Cap

.t,er Conditions( %i' FDI should 3e made 3y the owner of the ori2inal forei2n news a ers whose facsimile edition is ro osed to 3e 3rou2ht out in India. %ii' Pu3lication of facsimile edition of forei2n news a ers can 3e undertaken only 3y an entity incor orated or re2istered in India under the ro*isions of the Com anies Act" 1=-:. %iii' Pu3lication of facsimile edition of forei2n news a er would also 3e su3&ect to the )uidelines for u3lication of news a ers and eriodicals dealin2 with news and current affairs and as amended from time to time. u3lication of facsimile edition of forei2n news a ers issued 3y 7inistry of Information B 1roadcastin2 on 51.5.2##:" Civil Aviation The Ci*il A*iation sector includes Air orts" (cheduled and ,on.(cheduled domestic assen2er airlines" 9elico ter ser*ices+(ea lane ser*ices" )round 9andlin2 (er*ices" 7aintenance and 8e air or2aniKationsL Flyin2 trainin2 institutesL and Technical trainin2 institutions. For the ur oses of the Ci*il A*iation sector/ %i' Air ort means a landin2 and takin2 off area for aircrafts" usually with runways and aircraft maintenance and assen2er facilities and includes aerodrome as defined in clause %2' of section 2 of the Aircraft Act" 1=5$L %ii' Aerodrome means any definite or limited 2round or water area intended to 3e used" either wholly or in art" for the landin2 or de arture of aircraft" and includes all 3uildin2s" sheds" *essels" iers and other structures thereon or ertainin2 theretoL %iii' Air trans ort ser*ice means a ser*ice for the trans ort 3y air of ersons" mails or any other thin2" animate or inanimate" for any kind of remuneration whatsoe*er" whether such ser*ice consists of a sin2le fli2ht or series of fli2htsL %i*' Air Trans ort Jndertakin2 means an undertakin2 whose 3usiness includes the carria2e 3y air of assen2ers or car2o for hire or rewardL %*' Aircraft com onent means any art" the soundness and correct functionin2 of which" when fitted to an aircraft" is essential to the continued airworthiness or safety of the aircraft and includes any item of e@ui mentL -$

0) )3 :.2.=.1

%l) 4o)

%ectorHActivity

J of Entry 6oute EGuityH FDI Cap %*i' 9elico ter means a hea*ier.than.air aircraft su orted in fli2ht 3y the reactions of the air on one or more ower dri*en rotors on su3stantially *ertical aCisL %*ii' (cheduled air trans ort ser*ice means an air trans ort ser*ice undertaken 3etween the same two or more laces and o erated accordin2 to a u3lished time ta3le or with fli2hts so re2ular or fre@uent that they constitute a reco2niKa3ly systematic series" each fli2ht 3ein2 o en to use 3y mem3ers of the u3licL %*iii' ,on.(cheduled air trans ort ser*ice means any ser*ice which is not a scheduled air trans ort ser*ice and will include Car2o airlinesL %iC'Car2o airlines would mean such airlines which meet the conditions as 2i*en in the Ci*il A*iation 8e@uirements issued 3y the 7inistry of Ci*il A*iationL %C' (ea lane means an aero lane ca a3le normally of takin2 off from and ali2htin2 solely on waterL %Ci')round 9andlin2 means %i' ram handlin2" %ii' traffic handlin2 3oth of which shall include the acti*ities as s ecified 3y the 7inistry of Ci*il A*iation throu2h the Aeronautical Information Circulars from time to time" and %iii' any other acti*ity s ecified 3y the Central )o*ernment to 3e a art of either ram handlin2 or traffic handlin2.

:.2.=.2

Airports %a' )reenfield ro&ects %3' 6Cistin2 ro&ects

1##R 1##R

Automatic Automatic u to !$R )o*ernment route 3eyond !$R

:.2.=.5

Air Dransport %ervices %1'(cheduled Air Trans ort

(er*ice+ $=R FDI %1##R for ,8Is' Domestic (cheduled Passen2er Airline !$R FDI %1##R for ,8Is'

Automatic Automatic u $=R to

%2' ,on.(cheduled Air Trans ort (er*ice

%5'9elico ter ser*ices+sea lane ser*ices 1##R re@uirin2 D)CA a ro*al

)o*ernment route 3eyond $=R and u to !$R Automatic --

%l) 4o) :.2.=.5.1

%ectorHActivity

J of Entry 6oute EGuityH FDI Cap

.t,er Conditions( %a' Air Trans ort (er*ices would include Domestic (cheduled Passen2er AirlinesL ,on.(cheduled Air Trans ort (er*ices" helico ter and sea lane ser*ices. %3' Forei2n airlines are allowed to and entry routes mentioned a3o*e. %c' Forei2n airlines are also allowed to in*est in the ca ital of Indian com anies" o eratin2 scheduled and non.scheduled air trans ort ser*ices" u to the limit of $=R of their aid.u ca ital. (uch in*estment would 3e su3&ect to the followin2 conditions/ %i' %ii' %iii' It would 3e made under the )o*ernment a ro*al route. artici ate in the e@uity of com anies o eratin2 Car2o airlines" helico ter and sea lane ser*ices" as er the limits

The $=R limit will su3sume FDI and FII+FPI in*estment. The in*estments so made would need to com ly with the rele*ant re2ulations of (61I" such as the Issue of Ca ital and Disclosure 8e@uirements %ICD8' 8e2ulations+(u3stantial Ac@uisition of (hares and Takeo*ers %(A(T' 8e2ulations" as well as other a and re2ulations. lica3le rules

%i*'

A (cheduled 0 eratorAs Permit can 3e 2ranted only to a com any/ a) b) c) that is registered and has its principal place of business within India; the Chairman and at least two-thirds of the Directors of which are citizens of India; and the substantial ownership and effective control of which is vested in Indian nationals.

%*'

All forei2n nationals likely to 3e associated with Indian scheduled and non.scheduled air trans ort ser*ices" as a result of such in*estment shall 3e cleared from security *iew de loymentL and oint 3efore

%*i'

All technical e@ui ment that mi2ht 3e im orted into India as a result of such in*estment shall re@uire clearance from the rele*ant authority in the 7inistry of Ci*il A*iation. -:

%l) 4o)

%ectorHActivity

J of Entry 6oute EGuityH FDI Cap 4ote( %i' The FDI limits+entry routes" mentioned at ara2ra h :.2.=.5 %1' and :.2.=.5 %2' a3o*e" are a lica3le in the situation where there is no in*estment 3y forei2n airlines. %ii' The dis ensation for ,8Is re2ardin2 FDI u to 1##R will also continue in res ect of the in*estment re2ime s ecified at a3o*e. %iii'The olicy mentioned at ara :.2.=.5.1 %c' a3o*e is not a lica3le to 7+s Air India ?imited. ara :.2.=.5.1%c'%ii'

:.2.=.$

.t,er services under Civil Aviation sector %1' )round 9andlin2 (er*ices su&'ect to !$R FDI %1##R for ,8Is' sectoral re2ulations and security clearance %2'7aintenance and 8e air or2aniKationsL 1##R flyin2 trainin2 institutesL and technical trainin2 institutions.

Automatic u $=R

to

)o*ernment route 3eyond $=R and u to !$R Automatic

0) )1!

Courier services for carryin2 acka2es" 1##R arcels and other items which do not come within the am3it of the Indian Post 0ffice Act" 1>=> and eCcludin2 the acti*ity relatin2 to the distri3ution of letters.

Automatic

0) )11 :.2.11.1

Construction Development( Do<ns,ips, =ousin+, 2uilt-up infrastructure Townshi s" infrastructure de*elo ment commercial hos itals" housin2" and ro&ects remises" educational %which hotels" 3uilt.u construction. would resorts" 1##R Automatic

include" 3ut not 3e restricted to" housin2" institutions"

recreational facilities" city and re2ional le*el infrastructure'

-!

%l) 4o) :.2.11.2

%ectorHActivity

J of Entry 6oute EGuityH FDI Cap In*estment will 3e su3&ect to the followin2 conditions/ %1' 7inimum area to 3e de*elo ed under each ro&ect would 3e as under/ %i' In case of de*elo ment of ser*iced housin2 lots" a minimum land area of 1# hectares %ii' In case of construction.de*elo ment ro&ects" a minimum 3uilt.u area of -#"### s@.mts %iii'In case of a com3ination ro&ect" any one of the a3o*e two conditions would suffice. %2' 7inimum ca italiKation of J( X1# million for wholly owned su3sidiaries and J( X - million for &oint *entures with Indian artners. The funds would ha*e to 3e 3rou2ht in within siC months of commencement of 3usiness of the Com any. %5' 0ri2inal in*estment cannot 3e re atriated 3efore a eriod of three years from com letion of minimum ca italiKation. 0ri2inal in*estment means the entire amount 3rou2ht in as FDI. The lock.in eriod of three years will 3e a lied from the date of recei t of each installment+tranche of FDI or from the date of com letion of minimum ca italiKation" whiche*er is later. 9owe*er" the in*estor may 3e ermitted to eCit earlier with rior a ro*al of the )o*ernment throu2h the FIP1. %$' At least -#R of each such ro&ect must 3e de*elo ed within a eriod of fi*e years from the date of o3tainin2 all statutory clearances. The in*estor+in*estee com any would not 3e ermitted to sell unde*elo ed lots. For the ur ose of these 2uidelines" unde*elo ed lots will mean where roads" water su ly" street li2htin2" draina2e" sewera2e" and other con*eniences" as a lica3le under

rescri3ed re2ulations" ha*e not 3een made a*aila3le. It will 3e necessary that the in*estor ro*ides this infrastructure and o3tains the com letion certificate from the concerned local 3ody+ser*ice a2ency 3efore he would 3e allowed to dis ose of ser*iced housin2 lots. %-' The ro&ect shall conform to the norms and standards" includin2 land use

re@uirements and ro*ision of community amenities and common facilities" as laid down in the a lica3le 3uildin2 control re2ulations" 3ye.laws" rules" and other re2ulations of the (tate )o*ernment+7unici al+?ocal 1ody concerned. %:' The in*estor+in*estee com any shall 3e res onsi3le for o3tainin2 all necessary ->

%l) 4o)

%ectorHActivity

J of Entry 6oute EGuityH FDI Cap a ro*als" includin2 those of the 3uildin2+layout lans" de*elo in2 internal and eri heral areas and other infrastructure facilities" re@uirements as ayment of de*elo ment" eCternal de*elo ment and other char2es and com lyin2 with all other rescri3ed under a lica3le rules+3ye.laws+re2ulations of the (tate )o*ernment+ 7unici al+?ocal 1ody concerned.

%!' The (tate )o*ernment+7unici al+?ocal 1ody concerned" which a 3y the de*elo er. 4ote( %i' The conditions at %1' to %$' a3o*e would not a and in*estment 3y ,8Is. %ii' FDI is not allowed in 8eal 6state 1usiness. 0) )1 :.2.12.1

ro*es the

3uildin2+de*elo ment lans" would monitor com liance of the a3o*e conditions

ly to 9otels B Tourism"

9os itals" ( ecial 6conomic Sones %(6Ss'" 6ducation (ector" 0ld A2e 9omes

Industrial Par9s I new and eCistin2 1##R Automatic %i' Industrial Park is a ro&ect in which @uality infrastructure in the form of lots of de*elo ed land or 3uilt u s ace or a com3ination with common facilities" is de*elo ed and made a*aila3le to all the allottee units for the industrial acti*ity. %ii' Infrastructure refers to facilities re@uired for functionin2 of units located in the Industrial Park and includes roads %includin2 a and distri3ution of ower" air conditionin2. %iii' Common Facilities refer to the facilities a*aila3le for all the units located in the industrial ark" and include facilities of ower" roads %includin2 a roads'" water su roach ly and sewera2e" common effluent treatment" common roach roads'" water su ly and sewera2e" common effluent treatment facility" telecom network" 2eneration ur oses of

testin2" telecom ser*ices" air conditionin2" common facility 3uildin2s" industrial canteens" con*ention+conference halls" arkin2" tra*el desks" security ser*ice" first aid center" am3ulance and other safety ser*ices" trainin2 facilities and such other facilities meant for common use of the units located in the Industrial Park. %i*' Alloca3le area in the Industrial Park means. %a' in the case of lots of de*elo ed land. the net site area a*aila3le for allocation to the units" eCcludin2 the area for common facilities. %3' in the case of 3uilt u s ace. the floor area and 3uilt u s ace utiliKed for -=

%l) 4o)

%ectorHActivity ro*idin2 common facilities.

J of Entry 6oute EGuityH FDI Cap

%c' in the case of a com3ination of de*elo ed land and 3uilt.u s ace. the net site and floor area a*aila3le for allocation to the units eCcludin2 the site area and 3uilt u s ace utiliKed for ro*idin2 common facilities. %*' Industrial Acti*ity means manufacturin2L electricityL 2as and water su ost and telecommunicationsL software u3lishin2" consultancy and su lyL lyL

data rocessin2" data3ase acti*ities and distri3ution of electronic contentL other com uter related acti*itiesL 3asic and a lied 8BD on 3io.technolo2y" harmaceutical sciences+life sciences" natural sciences and en2ineerin2L 3usiness and mana2ement consultancy acti*itiesL and architectural" en2ineerin2 and other technical acti*ities. :.2.12.2 FDI in Industrial Parks would not 3e su3&ect to the conditionalities a Industrial Parks meet with the under.mentioned conditions/ %i' it would com rise of a minimum of 1# units and no sin2le unit shall occu y more than -#R of the alloca3le areaL %ii' the minimum ercenta2e of the area to 3e allocated for industrial acti*ity shall not 3e less than ::R of the total alloca3le area. 0) )11 :.2.15.1 %atellites. esta3lishment and o eration (atellites. esta3lishment and o eration" !$R su3&ect to the sectoral 2uidelines of De artment of ( ace+I(80 $= R Private %ecurity A+encies Delecom %ervices (includin+ Delecom Infrastructure Providers Cate+ory-I# All telecom ser*ices includin2 Telecom Infrastructure Pro*iders Cate2ory.I" Jnified Jnified 7o3ile ?icense ?icense" 8adio %Access *iK. 1asic" Cellular" Jnited Access (er*ices" (er*ices'" ,ational+International Trunked (er*ices :# 1##R )o*ernment lica3le for construction de*elo ment ro&ects etc. s elt out in ara :.2.11 a3o*e" ro*ided the

0) )1" 0) )1/

)o*ernment Automatic u to $=R )o*ernment route 3eyond $=R

?on2 Distance" Commercial H.(at" Pu3lic

%l) 4o)

%ectorHActivity %P78T('" ty es 7o3ile of )lo3al I(P 7o3ile licenses" Porta3ility Pro*ider eCce t Personal Hoice (er*ices" Cate2ory.I 0ther (er*ice

J of Entry 6oute EGuityH FDI Cap

Communications (er*ices %)7PC('" All 7ail+AudioteC+J7(" 8esale of IP?C" ,um3er Infrastructure s ace" :.2.1-.1 tower'

% ro*idin2 dark fi3re" ri2ht of way" duct Pro*iders. .t,er Condition/ FDI u to 1##R with $=R on the automatic route and 3eyond $=R on the 2o*ernment route su3&ect to o3ser*ance of licensin2 and security conditions 3y licensee as well as in*estors as notified 3y the De artment of Telecommunications %DoT' from time to time" eC ect 0ther (er*ice Pro*iders" which are allowed 1##R FDI on the automatic route. 0) )10 0) )10)1 Dradin+ Cas, $ Carry E,olesale 1##R Automatic

Dradin+HE,olesale Dradin+ (includin+ sourcin+ from M%Es# :.2.1:.1.1 Definition/ Cash B Carry ;holesale tradin2+;holesale tradin2" would mean sale of 2oods+merchandise to retailers" industrial" commercial" institutional or other rofessional 3usiness users or to other wholesalers and related su3ordinated ser*ice ro*iders. ;holesale tradin2 would" accordin2ly" im ly sales for the ur ose of trade" 3usiness and rofession" as o osed to sales for the ur ose of ersonal consum tion. The yardstick to determine whether the sale is wholesale or not would 3e the ty e of customers to whom the sale is made and not the siKe and *olume of sales. ;holesale tradin2 would include resale" rocessin2 and thereafter sale" 3ulk im orts with eC. ort+eC.3onded warehouse 3usiness sales and 121 e.Commerce. :.2.1:.1.2 Guidelines for Cas, $ Carry E,olesale Dradin+HE,olesale Dradin+ (ED#( %a' For undertakin2 ;T" re@uisite licenses+re2istration+ under the rele*ant )o*ernment+)o*ernment 1ody+)o*ernment ermits" as s ecified of the (tate (elf. Acts+8e2ulations+8ules+0rders

Authority+?ocal

)o*ernment 1ody under that (tate )o*ernment should 3e o3tained. :1

%l) 4o)

%ectorHActivity %3'

J of Entry 6oute EGuityH FDI Cap 6Cce t in case of sales to )o*ernment" sales made 3y the wholesaler would

3e considered as Gcash B carry wholesale tradin2+wholesale tradin2A with *alid 3usiness customers" only when ;T are made to the followin2 entities/ %I' 6ntities holdin2 sales taC+ HAT re2istration+ser*ice taC+eCcise duty re2istrationL or %II' 6ntities holdin2 trade Act" licenses issued i.e. 3y a license+re2istration a )o*ernment certificate+mem3ershi 6sta3lishment certificate+re2istration under (ho s and

Authority+)o*ernment 1ody+?ocal (elf.)o*ernment Authority" reflectin2 that the entity+ erson holdin2 the license+ re2istration certificate+ mem3ershi certificate" as the case may 3e" is itself+ himself+herself en2a2ed in a 3usiness in*ol*in2 commercial acti*ityL or %III' 6ntities holdin2 ermits+license etc. for undertakin2 retail trade %like teh3aKari and similar license for hawkers' from )o*ernment Authorities+?ocal (elf )o*ernment 1odiesL or %IH' Institutions ha*in2 certificate of incor oration or re2istration as a society or re2istration as u3lic trust for their self consum tion) 4ote( An entity, to <,om ED is made, may fulfill any one of t,e " conditions) %c' Full records indicatin2 all the details of such sales like name of entity" kind of entity" re2istration+license+ ermit etc. num3er" amount of sale etc. should 3e maintained on a day to day 3asis. %d' ;T of 2oods would 3e ermitted amon2 com anies of the same 2rou . 9owe*er" such ;T to 2rou com anies taken to2ether should not eCceed 2-R of the total turno*er of the wholesale *enture %e' %f' ;T can 3e undertaken as er normal 3usiness ractice" includin2 eCtendin2 credit facilities su3&ect to a consumer directly. lica3le re2ulations. A ;holesale+Cash B carry trader cannot o en retail sho s to sell to the

:2

%l) 4o) 0) )10) :.2.1:.2.1

%ectorHActivity E-commerce activities

J of Entry 6oute EGuityH FDI Cap 1##R Automatic

6.commerce acti*ities refer to the acti*ity of 3uyin2 and sellin2 3y a com any throu2h the e.commerce latform. (uch com anies would en2a2e only in 1usiness to 1usiness %121' e.commerce and not in retail tradin2" inter.alia im lyin2 that eCistin2 restrictions on FDI in domestic tradin2 would 3e a as well. lica3le to e.commerce

0) )10)1

%in+le 2rand product retail tradin+ 1##R

Automatic u to $=R

)o*ernment route 3eyond $=R %1' Forei2n In*estment in (in2le 1rand roduct retail tradin2 is aimed at attractin2 in*estments in roduction and marketin2" im ro*in2 the a*aila3ility of such 2oods for the consumer" encoura2in2 increased sourcin2 of 2oods from India" and enhancin2 com etiti*eness of Indian enter rises throu2h access to 2lo3al desi2ns" technolo2ies and mana2ement ractices. %2' FDI in (in2le 1rand roduct retail tradin2 would 3e su3&ect to the followin2 conditions/ %a'Products to 3e sold should 3e of a G(in2le 1randA only. %3' Products should 3e sold under the same 3rand internationally i.e. roducts should 3e sold under the same 3rand in one or more countries other than India. %c'G(in2le 1randA roduct.retail tradin2 would co*er only roducts which are 3randed durin2 manufacturin2. %d' A non.resident entity or entities" whether owner of the 3rand or otherwise" shall 3e ermitted to undertake Gsin2le 3randA roduct retail tradin2 in the country for the s ecific 3rand" directly or throu2h a le2ally tena3le a2reement with the 3rand owner for undertakin2 sin2le 3rand roduct retail tradin2. The onus for ensurin2 com liance with this condition will rest with the Indian entity carryin2 out sin2le.3rand roduct retail tradin2 in India. The in*estin2 entity shall ro*ide e*idence to this effect at the time of seekin2 a ro*al" includin2 a co y of the licensin2+franchise+su3.licence a2reement" s ecifically indicatin2 com liance with the a3o*e condition. The re@uisite e*idence should 3e filed with the 81I for the automatic route and (IA+FIP1 for cases in*ol*in2 a ro*al. :5

%l) 4o)

%ectorHActivity

J of Entry 6oute EGuityH FDI Cap %e'In res ect of ro osals in*ol*in2 FDI 3eyond -1R" sourcin2 of 5#R of the *alue of 2oods urchased" will 3e done from India" refera3ly from 7(76s" *illa2e and cotta2e industries" artisans and craftsmen" in all sectors. The @uantum of domestic sourcin2 will 3e self.certified 3y the com any" to 3e su3se@uently checked" 3y statutory auditors" from the duly certified accounts which the com any will 3e re@uired to maintain. This
st

rocurement

re@uirement would ha*e to 3e met" in the first instance" as an a*era2e of fi*e yearsA total *alue of the 2oods urchased" 3e2innin2 1 A ril of the year durin2 which the first tranche of FDI is recei*ed. Thereafter" it would ha*e to 3e met on an annual 3asis. For the ur ose of ascertainin2 the sourcin2 re@uirement" the rele*ant entity would 3e the com any" incor orated in India" which is the reci ient of FDI for the ur ose of carryin2 out sin2le.3rand roduct retail tradin2. %f' 8etail tradin2" in any form" 3y means of e.commerce" would not 3e ermissi3le" for com anies with FDI" en2a2ed in the acti*ity of sin2le.3rand retail tradin2. %5' A lication seekin2 ermission of the )o*ernment for FDI eCceedin2 $=R in a com any which ro oses to undertake sin2le 3rand retail tradin2 in India would 3e made to the (ecretariat for Industrial Assistance %(IA' in the De artment of Industrial Policy B Promotion. The a lications would s ecifically indicate the roduct+ roduct cate2ories which are ro osed to 3e sold under a G(in2le 1randA. Any addition to the roduct+ roduct cate2ories to 3e sold under G(in2le 1randA would re@uire a fresh a ro*al of the )o*ernment. In case of FDI u to $=R" the roducts list of roducts+ roduct cate2ories ro osed to 3e sold eCce t food would 3e ro*ided to the 81I. %$' A lications would 3e rocessed in the De artment of Industrial Policy B Promotion" to determine whether the ro osed in*estment satisfies the notified 2uidelines" 3efore 3ein2 considered 3y the FIP1 for )o*ernment a ro*al.

:$

%l) 4o) 0) )10)"

%ectorHActivity Multi 2rand 6etail Dradin+ %1' the followin2 conditions/ %i' Fresh a2ricultural

J of Entry 6oute EGuityH FDI Cap -1R )o*ernment

FDI in multi 3rand retail tradin2" in all roducts" will 3e ermitted" su3&ect to roduce" includin2 fruits" *e2eta3les" flowers" 2rains"

ulses" fresh oultry" fishery and meat roducts" may 3e un3randed. %ii' 7inimum amount to 3e 3rou2ht in" as FDI" 3y the forei2n in*estor" would 3e J( X 1## million. %iii' At least -#R of total FDI 3rou2ht in the first tranche of J( X 1## million" shall 3e in*ested in 43ack.end infrastructure4 within three years"where G3ack.end infrastructureA will include ca ital eC enditure on all acti*ities" eCcludin2 that on front.end unitsL for instance" 3ack.end infrastructure will include in*estment made towards rocessin2" manufacturin2" distri3ution" desi2n im ro*ement" @uality control" acka2in2" lo2istics" stora2e" ware. house" a2riculture market roduce infrastructure etc. 6C enditure on land cost and rentals" if any" will not 3e counted for ur oses of 3ackend infrastructure. (u3se@uent in*estment in 3ackend infrastructure would 3e made 3y the 718T retailer as needed" de endin2 u on its 3usiness re@uirements. %i*' At least 5#R of the *alue of rocurement of manufactured+ rocessed lant B machinery not roducts urchased shall 3e sourced from Indian micro" small and medium industries" which ha*e a total in*estment in eCceedin2 J( X 2.## million. This *aluation refers to the *alue at the time of installation" without ro*idin2 for de reciation. The Gsmall industryA status would 3e reckoned only at the time of first en2a2ement with the retailer" and such industry shall continue to @ualify as a Gsmall industryA for this ur ose" e*en if it out2rows the said in*estmentof J( X 2.## million durin2 the course of its relationshi with the said retailer. (ourcin2 from a2ricultural co.o erati*es and farmers co.o erati*es would also 3e considered in this cate2ory. The rocurement re@uirement would ha*e to 3e met" in the first instance" as an a*era2e of fi*e yearsA total *alue of the manufactured+ rocessed roducts urchased" 3e2innin2 1 A ril of the
st

year durin2 which the first tranche of FDI is recei*ed. Thereafter" it would ha*e to 3e met on an annual 3asis. :-

%l) 4o)

%ectorHActivity

J of Entry 6oute EGuityH FDI Cap %*' (elf.certification 3y the com any" to ensure com liance of the conditions at serial nos. %ii'" %iii' and %i*' a3o*e" which could 3e cross.checked" as and when re@uired. Accordin2ly" the in*estors shall maintain accounts" duly certified 3y statutory auditors. %*i' 8etail sales outlets may 3e set u only in cities with a o ulation of more than 1# lakh as er 2#11 Census or any other cities as er the decision of the res ecti*e (tate )o*ernments" and may also co*er an area of 1# kms around the munici al+ur3an a22lomeration limits of such citiesL retail locations will 3e restricted to conformin2 areas as er the 7aster+Sonal Plans of the concerned cities and ro*ision will 3e made for re@uisite rocurement of a2ricultural olicy only and the (tate facilities such as trans ort connecti*ity and arkin2.

%*ii' )o*ernment will ha*e the first ri2ht to roducts. %*iii' The a3o*e olicy is an ena3lin2

)o*ernments+Jnion Territories would 3e free to take their own decisions in re2ard to im lementation of the olicy. Therefore" retail sales outlets may 3e set u in those (tates+Jnion Territories which ha*e a2reed" or a2ree in future" to allow FDI in 718T under this olicy. The list of (tates+Jnion Territories which ha*e con*eyed their a2reement is at %2' 3elow. (uch a2reement" in future" to ermit esta3lishment of retail outlets under this olicy" would 3e con*eyed to the )o*ernment of India throu2h the De artment of Industrial Policy B Promotion and additions would 3e made to the list at %2' 3elow accordin2ly. The esta3lishment of the retail sales outlets will 3e in com liance of a lica3le (tate+Jnion Territory laws+ re2ulations" such as the (ho s and 6sta3lishments Act etc. %iC' 8etail tradin2" in any form" 3y means of e.commerce" would not 3e ermissi3le" for com anies with FDI" en2a2ed in the acti*ity of multi. 3rand retail tradin2. %C' A lications would 3e rocessed in the De artment of Industrial Policy B Promotion" to determine whether the a ro*al. :: ro osed in*estment satisfies the notified 2uidelines" 3efore 3ein2 considered 3y the FIP1 for )o*ernment

%l) 4o)

%ectorHActivity

J of Entry 6oute EGuityH FDI Cap %2' ?ist of (tates+Jnion Territories as mentioned in Para2ra h :.2.1:.$%1'%*iii' 1. Andhra Pradesh 2. Assam 5. Delhi $. 9aryana -. 9imachal Pradesh :. Qammu B Dashmir !. Darnataka >. 7aharashtra =. 7ani ur 1#. 8a&asthan 11. Jttarakhand 12. Daman B Diu and Dadra and ,a2ar 9a*eli %Jnion Territories' Financial %ervices Forei2n in*estment in other financial ser*ices" other than those indicated 3elow" would re@uire rior a ro*al of the )o*ernment/

Financial %ervices
0) )17

0) )17)1 :.2.1!.1.1

Asset 6econstruction Companies GAsset 8econstruction Com anyA %A8C' 1##R of aid.u Automatic u to ca ital of A8C $=R means a com any re2istered with the %FDIYFII+FPI' )o*ernment route 8eser*e 1ank of India under (ection 5 of 3eyond $=R the (ecuritisation and 8econstruction of Financial Assets and 6nforcement of (ecurity Interest Act" 2##2 %(A8FA6(I Act'.

:.2.1!.1.2

.t,er Conditions( %i' Persons resident outside India can in*est in the ca ital of Asset 8econstruction Com anies %A8Cs' re2istered with 8eser*e 1ank" u to $=R on the automatic route" and 3eyond $=R on the )o*ernment route. %ii' ,o s onsor may hold more than -#R of the shareholdin2 in an A8C either 3y way of FDI or 3y routin2 it throu2h an FII+FPI controlled 3y the sin2le s onsor. %iii' The total shareholdin2 of an indi*idual FII+FPI shall 3e 3elow 1#R of the total aid.u ca ital. %i*' FIIs+FPIs can in*est in the (ecurity 8ecei ts %(8s' issued 3y A8Cs re2istered with 8eser*e 1ank. FIIs+FPIs can in*est u to !$ er cent of each tranche of scheme of (8s. (uch in*estment should 3e within the FII+FPI limit on cor orate :!

%l) 4o)

%ectorHActivity 3onds

J of Entry 6oute EGuityH FDI Cap rescri3ed from time to time" and sectoral ca s under eCtant FDI ro*isions of section 5%5' %f' of

8e2ulations should also 3e com lied with. %*' All in*estments would 3e su3&ect to (ecurity Interest Act" 2##2. 0) )17) :.2.1!.2.1 2an9in+- Private %ector 1ankin2. Pri*ate (ector !$R includin2 Automatic u to $=R in*estment 3y FIIs+FPIs )o*ernment route 3eyond $=R and u to !$R (ecuritiKation and 8econstruction of Financial Assets and 6nforcement of

:.2.1!.2.2

.t,er Conditions( %1' This !$R limit will include in*estment under the Portfolio In*estment (cheme %PI(' 3y FIIs+FPIs" ,8Is and shares ac@uired rior to (e tem3er 1:" 2##5 3y erstwhile 0C1s" and continue to include IP0s" Pri*ate lacements" )D8+AD8s and ac@uisition of shares from eCistin2 shareholders. %2' The a22re2ate forei2n in*estment in a ri*ate 3ank from all sources will 3e allowed u to a maCimum of !$ er cent of the aid u ca ital of the 1ank. At all times" at least 2: er cent of the aid u ca ital will ha*e to 3e held 3y residents" eCce t in re2ard to a wholly.owned su3sidiary of a forei2n 3ank. %5' The sti ulations as a3o*e will 3e a sector 3anks also. %$' The ermissi3le limits under ortfolio in*estment schemes throu2h stock eCchan2es for FIIs+FPIs and ,8Is will 3e as follows/ %i' In the case of FIIs+FPIs" as hitherto" indi*idual FII+FPI holdin2 is restricted to 3elow 1# er cent of the total aid.u ca ital" a22re2ate limit for all aid.u ca ital 3y the 3ank FIIs+FPIs+FFIs cannot eCceed 2$ er cent of the total aid.u ca ital" which can 3e raised to $= er cent of the total concerned throu2h a resolution 3y its 1oard of Directors followed 3y a s ecial resolution to that effect 3y its )eneral 1ody. %a' Thus" the FII+FPI+FFI in*estment limit will continue to 3e within $= er cent of the total aid.u ca ital. %3' In the case of ,8Is" as hitherto" indi*idual holdin2 is restricted to - er cent of the total aid.u ca ital 3oth on re atriation and non.re atriation 3asis and a22re2ate limit cannot eCceed 1# er cent of the total aid.u :> lica3le to all in*estments in eCistin2 ri*ate

%l) 4o)

%ectorHActivity

J of Entry 6oute EGuityH FDI Cap ca ital 3oth on re atriation and non.re atriation 3asis. 9owe*er" ,8I holdin2 can 3e allowed u to 2$ er cent of the total aid.u ca ital 3oth on re atriation and non.re atriation 3asis ro*ided the 3ankin2 com any asses a s ecial resolution to that effect in the )eneral 1ody.

%c' A

lications for forei2n direct in*estment in ri*ate 3anks ha*in2 &oint

*enture+su3sidiary in insurance sector may 3e addressed to the 8eser*e 1ank of India %81I' for consideration in consultation with the Insurance 8e2ulatory and De*elo ment Authority %I8DA' in order to ensure that the 2: er cent limit of forei2n shareholdin2 a lica3le for the insurance sector is not 3ein2 3reached. %d' Transfer of shares under FDI from residents to non.residents will continue to re@uire a a3o*e as a lica3le. %e' The olicies and rocedures rescri3ed from time to time 3y 81I and other institutions such as (61I" D+o Com any Affairs and I8DA on these matters will continue to a ly. %f' 81I 2uidelines relatin2 to ac@uisition 3y urchase or otherwise of shares of a ri*ate 3ank" if such ac@uisition results in any erson ownin2 or controllin2 - er cent or more of the aid u ca ital of the ri*ate 3ank will a ly to non.resident in*estors as well. %ii' (ettin2 u of a su3sidiary 3y forei2n 3anks %a' Forei2n 3anks will 3e ermitted to either ha*e 3ranches or su3sidiaries 3ut not 3oth. %3' Forei2n 3anks re2ulated 3y 3ankin2 su er*isory authority in the home country and meetin2 8eser*e 1ankAs licensin2 criteria will 3e allowed to hold 1## er cent aid u ca ital to ena3le them to set u a wholly. owned su3sidiary in India. %c' A forei2n 3ank may o erate in India throu2h only one of the three channels *iK." %i' 3ranches %ii' a wholly.owned su3sidiary and %iii' a su3sidiary with a22re2ate forei2n in*estment u to a maCimum of !$ er cent in a ri*ate 3ank. %d' A forei2n 3ank will 3e ermitted to esta3lish a wholly.owned su3sidiary either throu2h con*ersion of eCistin2 3ranches into a su3sidiary or := ro*al of 81I and )o*ernment as er ara 5.:.2

%l) 4o)

%ectorHActivity

J of Entry 6oute EGuityH FDI Cap throu2h a fresh 3ankin2 license. A forei2n 3ank will 3e ermitted to esta3lish a su3sidiary throu2h ac@uisition of shares of an eCistin2 ri*ate sector 3ank ro*ided at least 2: er cent of the aid ca ital of the ri*ate sector 3ank is held 3y residents at all times consistent with ara %i' %3' a3o*e.

%e' A su3sidiary of a forei2n 3ank will 3e su3&ect to the licensin2 re@uirements and conditions 3roadly consistent with those for new ri*ate sector 3anks. %f' )uidelines for settin2 u a wholly.owned su3sidiary of a forei2n 3ank will 3e issued se arately 3y 81I. %2' All a lications 3y a forei2n 3ank for settin2 u a su3sidiary or for con*ersion of their eCistin2 3ranches to su3sidiary in India will ha*e to 3e made to the 81I. %iii' At resent there is a limit of ten er cent on *otin2 ri2hts in res ect of 3ankin2 com anies" and this should 3e noted 3y otential in*estor. Any chan2e in the ceilin2 can 3e 3rou2ht a3out only after final olicy decisions and a ro riate Parliamentary a ro*als. 0) )17)1 :.2.1!.5.1 2an9in+- Pu&lic %ector 1ankin2. Pu3lic (ector 1ankin2 Com anies %FDI and )o*ernment to 2#R Portfolio In*estment' %Ac@uisition B su&'ect lica3le to

Transfer of Jndertakin2s' Acts 1=!#+>#. This ceilin2 %2#R' is also a 1anks. 0) )17)" :.2.1!.$.1 Commodity E*c,an+es %1' Futures tradin2 in commodities are re2ulated under the Forward Contracts %8e2ulation' Act" 1=-2. Commodity 6Cchan2es" like (tock 6Cchan2es" are infrastructure com anies in the commodity futures market. ;ith a *iew to infuse 2lo3ally acce ta3le 3est ractices" modern mana2ement skills and latest technolo2y" it was decided to allow forei2n in*estment in Commodity 6Cchan2es. %2' For the ur oses of this cha ter" %i'Commodity 6Cchan2e is a reco2niKed association under the ro*isions of !# the (tate 1ank of India and its associate

%l) 4o)

%ectorHActivity

J of Entry 6oute EGuityH FDI Cap the Forward Contracts %8e2ulation' Act" 1=-2" as amended from time to time" to ro*ide eCchan2e latform for tradin2 in forward contracts in commodities.

%ii' reco2niKed association means an association to which reco2nition for the time 3ein2 has 3een 2ranted 3y the Central )o*ernment under (ection : of the Forward Contracts %8e2ulation' Act" 1=-2 %iii'Association means any 3ody of indi*iduals" whether incor orated or not" constituted for the ur oses of re2ulatin2 and controllin2 the 3usiness of the sale or urchase of any 2oods and commodity deri*ati*e. %i*'Forward contract means a contract for the deli*ery of 2oods and which is not a ready deli*ery contract. %*' Commodity deri*ati*e means. a contract for deli*ery of 2oods" which is not a ready deli*ery contractL or a contract for differences which deri*es its *alue from rices or indices of rices of such underlyin2 2oods or acti*ities" ser*ices" ri2hts" interests and e*ents" as may 3e notified in consultation with the Forward 7arkets Commission 3y the Central )o*ernment" 3ut does not include securities. :.2.1!.$.2 Commodity E*c,an+e Automatic $=R %FDI Y FII+FPI' TIn*estment 3y 8e2istered FII+FPI under Portfolio In*estment (cheme %PI(' will 3e limited to 25R and In*estment under FDI (cheme limited to 2:R U

:.2.1!.$.5

.t,er Conditions( %1' FII+FPI urchases shall 3e restricted to secondary market only. %2' ,o non.resident in*estor+entity" includin2 ersons actin2 in concert" will hold more than -R of the e@uity in these com anies. %5' Forei2n in*estment in commodity eCchan2es will 3e su3&ect to the 2uidelines of the Central )o*ernment+Forward 7arkets Commission %F7C' from time to time.

0) )17)/ :.2.1!.-.1

Credit Information Companies (CIC# Credit Information Com anies

!$R %FDIYFII+ FPI'

Automatic

!1

%l) 4o) :.2.1!.-.2

%ectorHActivity

J of Entry 6oute EGuityH FDI Cap

.t,er Conditions( %1' Forei2n in*estment in Credit Information Com anies is su3&ect to the Credit Information Com anies %8e2ulation' Act" 2##-. %2' Forei2n in*estment is ermitted su3&ect to re2ulatory clearance from 81I. %5' In*estment 3y a re2istered FII+FPI under the Portfolio In*estment (cheme would 3e ermitted u to 2$R only in the CICs listed at the (tock 6Cchan2es" within the o*erall limit of !$R for forei2n in*estment. %$' (uch FII+FPI in*estment would 3e ermitted su3&ect to the conditions that/ %a' A sin2le entity should directly or indirectly hold 3elow 1#R e@uity. %3' Any ac@uisition in eCcess of 1R will ha*e to 3e re orted to 81I as a mandatory re@uirementL and %c' FIIs+FPIs in*estin2 in CICs shall not seek a re resentation on the 1oard of Directors 3ased u on their shareholdin2.

0) )17)0 :.2.1!.:.1

Infrastructure Company in t,e %ecurities Mar9et Infrastructure com anies in (ecurities $=R %FDI Y FII+FPI' Automatic 7arkets" namely" stock eCchan2es" TFDI limit of 2: er cent and FII+FPI limit of 25 de ositories and clearin2 cor orations" in er cent of the aid.u ca ital U com liance with (61I 8e2ulations .t,er Condition( FII+FPI can in*est only throu2h urchases in the secondary market. Insurance %i' Insurance Com any %ii' Insurance 1rokers %iii' Third Party Administrators %i*' (ur*eyors and ?oss Assessors 2:R %FDIYFII+FPIY,8I' Automatic

:.2.1!.:.2 0) )17)7 :.2.1!.!.1

:.2.1!.!.2

.t,er Conditions( %1' FDI in the Insurance sector" as rescri3ed in the Insurance Act" 1=5>" is allowed under the automatic route. %2' This will 3e su3&ect to the condition that Com anies 3rin2in2 in FDI shall o3tain necessary license from the Insurance 8e2ulatory B De*elo ment Authority for undertakin2 insurance acti*ities. %5' The ro*isions of ara2ra hs :.2.1!.2.2%$'%i' %c' B %e'" relatin2 to G1ankin2. Pri*ate (ectorA" shall 3e a com anies. !2 lica3le in res ect of 3ank romoted insurance

%l) 4o)

%ectorHActivity

J of Entry 6oute EGuityH FDI Cap %$' Indian Insurance Com any is defined as a com any/ %a' which is formed and re2istered under the Com anies Act" 1=-:L %3' in which the a22re2ate holdin2s of e@uity shares 3y a forei2n com any either 3y itself or throu2h its su3sidiary com anies or its nominees" do not eCceed 2:R aid.u e@uity ca ital of such Indian insurance com anyL %c' whose sole ur ose is to carry on life insurance 3usiness or 2eneral insurance 3usiness or re.insurance 3usiness. %-' As er I8DA %Insurance 1rokers' 8e2ulations" 2##2" insurance 3roker means a erson for the time.3ein2 licensed 3y the Authority under re2ulation 11" who for remuneration arran2es insurance contracts with insurance com anies and+or reinsurance com anies on 3ehalf of his clients. %:' As er I8DA %TPA.9ealth (er*ices' 8e2ulations" 2##1" TPA means a Third Party Administrator who" for the time 3ein2" is licensed 3y the Authority" and is en2a2ed" for a fee or remuneration" 3y whate*er name called as may 3e s ecified in the a2reement with an insurance com any" for the ro*ision of health ser*ices. %!' (ur*eyors and ?oss Assessors will 3e 2o*erned 3y the I8DA Insurance (ur*eyors and ?oss Assessors %?icencin2" Professional 8e@uirements and Code of Conduct' 8e2ulations" 2###.

0) )17)5 :.2.1!.>.1

4on-2an9in+ Finance Companies (42FC# Forei2n in*estment in ,1FC is allowed 1##R under the automatic route in only the followin2 acti*ities/ %i' 7erchant 1ankin2 %ii' Jnder ;ritin2 %iii' Portfolio 7ana2ement (er*ices %i*'In*estment Ad*isory (er*ices %*' Financial Consultancy %*i'(tock 1rokin2 %*ii' Asset 7ana2ement %*iii' Henture Ca ital %iC' Custodian (er*ices !5 Automatic

%l) 4o)

%ectorHActivity %C' Factorin2 %Ci' Credit 8atin2 A2encies %Cii' ?easin2 B Finance %Ciii' 9ousin2 Finance %Ci*' ForeC 1rokin2 %C*' Credit Card 1usiness %C*i' 7oney Chan2in2 1usiness %C*ii' 7icro Credit %C*iii' 8ural Credit

J of Entry 6oute EGuityH FDI Cap

:.2.1!.>.2

.t,er Conditions( %1' In*estment would 3e su3&ect to the followin2 minimum ca italisation norms/ %i' J( X #.- million for forei2n ca ital u to -1R to 3e 3rou2ht u front. %ii' J( X - million for forei2n ca ital more than -1R and u to !-R to 3e 3rou2ht u front. %iii'J( X -# million for forei2n ca ital more than !-R out of which J( X !.million to 3e 3rou2ht u front and the 3alance in 2$ months. %i*',1FCs %i' ha*in2 forei2n in*estment more than !-R and u to 1##R" and %ii' with a minimum ca italisation of J( X -# million" can set u ste down su3sidiaries for s ecific ,1FC acti*ities" without any restriction on the num3er of o eratin2 su3sidiaries and without 3rin2in2 in additional ca ital. D,e minimum capitali;ation condition as mandated &y para 1)1!)")1, t,erefore, s,all not apply to do<nstream su&sidiaries) %*' Qoint Henture o eratin2 ,1FCs that ha*e !-R or less than !-R forei2n in*estment can also set u su3sidiaries for undertakin2 other ,1FC acti*ities" su3&ect to the su3sidiaries also com lyin2 with the a lica3le minimum ca italisation norm mentioned in %i'" %ii' and %iii' a3o*e and %*i' 3elow. %*i',on. Fund 3ased acti*ities/ J( X#.- million to 3e 3rou2ht u front for all ermitted non.fund 3ased ,1FCs irres ecti*e of the le*el of forei2n in*estment su3&ect to the followin2 condition/ It would not 3e ermissi3le for such a com any to set u any su3sidiary for any other acti*ity" nor it can artici ate in any e@uity of an ,1FC !$

%l) 4o)

%ectorHActivity holdin2+o eratin2 com any.

J of Entry 6oute EGuityH FDI Cap

4ote( The followin2 acti*ities would 3e classified as ,on.Fund 1ased acti*ities/ %a' In*estment Ad*isory (er*ices %3' Financial Consultancy %c' ForeC 1rokin2 %d' 7oney Chan2in2 1usiness %e' Credit 8atin2 A2encies %*ii' This will 3e su3&ect to com liance with the 2uidelines of 81I. 4ote( %i' Credit Card 3usiness includes issuance" sales" marketin2 B desi2n of *arious ayment roducts such as credit cards" char2e cards" de3it cards" stored *alue cards" smart card" *alue added cards etc. %ii' ?easin2 B Finance co*ers only financial leases and not o eratin2 leases. %2' The ,1FC will ha*e to com ly with the 2uidelines of the rele*ant re2ulator+s" as a 0) )15 :.2.1>.1 :.2.1>.2 :.2.1>.5 lica3le. .t,ers P,armaceuticals )reenfield 1rownfield 1##R 1##R Automatic )o*ernment

.t,er Conditions( %i' G,on.com eteA clause would not 3e allowed eCce t in s ecial circumstances with the a ro*al of the Forei2n In*estment Promotion 1oard. %ii' The ros ecti*e in*estor and the ros ecti*e in*estee are re@uired to ro*ide a certificate alon2 with the FIP1 a %iii' )o*ernment may incor orate a cases" at the time of 2rantin2 a lication as er Anne*-11. ro riate conditions for FDI in 3rownfield ro*al. Automatic

0) )13 :.2.1=.1

Po<er E*c,an+es Power 6Cchan2es re2istered under the $=R %FDIYFII+FPI' Central 6lectricity 8e2ulatory Commission %Power 7arket' 8e2ulations" 2#1#.

:.2.1=.2

.t,er Conditions( %i' (uch forei2n in*estment would 3e su3&ect to an FDI limit of 2: er cent and an FII+FPI limit of 25 er cent of the aid.u ca italL !-

%l) 4o)

%ectorHActivity %ii' %iii' %i*'

J of Entry 6oute EGuityH FDI Cap FII+FPI urchases shall 3e restricted to secondary market onlyL ,o non.resident in*estor+entity" includin2 ersons actin2 in concert" will hold more than -R of the e@uity in these com aniesL and The forei2n in*estment would 3e in com liance with (61I 8e2ulationsL other a lica3le laws+re2ulationsL security and other conditionalities.

!:

C,apter 7( 6emittance, 6eportin+ and 7iolation


7)1 !.1.1 6emittance and 6epatriation 6emittance Companies/ %i' (ale roceeds of shares and securities and their remittance is Gremittance of assetA 2o*erned 3y The Forei2n 6Cchan2e 7ana2ement %8emittance of Assets' 8e2ulations" 2### under F67A. %ii' AD Cate2ory.I 3ank can allow the remittance of sale roceeds of a security %net of a lica3le taCes' to the seller of shares resident outside India" ro*ided the security has 3een held on re atriation 3asis" the sale of security has 3een made in accordance with the rescri3ed 2uidelines and ,0C+taC clearance certificate from the Income TaC De artment has 3een roduced. %iii' 6emittance on <indin+ upHliGuidation of Companies AD Cate2ory.I 3anks ha*e 3een allowed to remit windin2 u com anies in India" which are under li@uidation" su3&ect to a court windin2 u *oluntary windin2 u su3mits/ a. ,o o3&ection or TaC clearance certificate from Income TaC De artment for the remittance. 3. Auditor4s certificate confirmin2 that all lia3ilities in India ha*e 3een either fully aid or ade@uately ro*ided for. c. Auditor4s certificate to the effect that the windin2 u accordance with the ro*isions of the Com anies Act" 1=-:. d. In case of windin2 u otherwise than 3y a court" an auditor4s licant or the com any under ermittin2 the is in roceeds of ayment of of sale proceedsH6emittance on <indin+ upH@iGuidation of

lica3le taCes. ?i@uidation may 3e su3&ect to any order issued 3y the the com any or the official li@uidator in case of under the ro*isions of the Com anies Act" 1=-:. ro*ided the a licant

AD Cate2ory.I 3anks shall allow the remittance

certificate to the effect that there are no le2al roceedin2s endin2 in any court in India a2ainst the a remittance. !.1.2 6epatriation of Dividend( Di*idends are freely re atria3le without any restrictions %net after TaC deduction at source or Di*idend Distri3ution TaC" if any" as the case may 3e'. The re atriation is 2o*erned 3y the ro*isions of the Forei2n 6Cchan2e !! li@uidation and there is no le2al im ediment in

7ana2ement %Current Account Transactions' 8ules" 2###" as amended from time to time. !.1.5 6epatriation of Interest( Interest on fully" mandatorily B com ulsorily con*erti3le de3entures is also freely re atria3le without any restrictions %net of a lica3le taCes'. The re atriation is 2o*erned 3y the ro*isions of the Forei2n 6Cchan2e 7ana2ement %Current Account Transactions' 8ules" 2###" as amended from time to time. 7) . !.2.1 6eportin+ of FDI 6eportin+ of Inflo< %i' An Indian com any recei*in2 in*estment from outside India for issuin2 shares+con*erti3le de3entures+ reference shares under the FDI (cheme" should re ort the details of the amount of consideration to the 8e2ional 0ffice concerned of the 8eser*e 1ank not later than 5# days from the date of recei t in the Ad*ance 8e ortin2 Form enclosed as Anne*-/. %ii' Indian com anies are re@uired to re ort the details of the recei t of the amount of consideration for issue of shares+con*erti3le de3entures" throu2h an AD Cate2ory.I 3ank" to2ether with a co y+ies of the FI8C+s e*idencin2 the recei t of the remittance alon2 with the DEC re ort %enclosed as Anne*-0' on the non. resident in*estor from the o*erseas 3ank remittin2 the amount. The re ort would 3e acknowled2ed 3y the 8e2ional 0ffice concerned" which will allot a Jni@ue Identification ,um3er %JI,' for the amount re orted. !.2.2 6eportin+ of issue of s,ares %i' After issue of shares %includin2 3onus and shares issued on ri2hts 3asis and shares issued under 6(0P'+fully" mandatorily B com ulsorily con*erti3le de3entures+fully" mandatorily B com ulsorily con*erti3le reference shares" the Indian com any has to file Form FC.)P8" enclosed in Anne*-1" not later than 5# days from the date of issue of shares. %ii' Form FC.)P8 has to 3e duly filled u and si2ned 3y 7ana2in2 Director+Director+(ecretary of the Com any and su3mitted to the AuthoriKed Dealer of the com any" who will forward it to the 8eser*e 1ank. The followin2 documents ha*e to 3e su3mitted alon2 with the form/ %a' A certificate from the Com any (ecretary of the com any certifyin2 that/ %A' all the re@uirements of the Com anies Act" 1=-: ha*e 3een com lied withL %1' terms and conditions of the )o*ernmentAs a com lied withL !> ro*al" if any" ha*e 3een

%C' the com any is eli2i3le to issue shares under these 8e2ulationsL and %D' the com any has all ori2inal certificates issued 3y authoriKed dealers in India e*idencin2 recei t of amount of consideration. 4ote( For com anies with aid u ca ital with less than 8s.- crore" the a3o*e mentioned certificate can 3e 2i*en 3y a racticin2 com any secretary. %3' A certificate from (61I re2istered 7erchant 1anker or Chartered Accountant indicatin2 the manner of arri*in2 at the rice of the shares issued to the ersons resident outside India. %c' The re ort of recei t of consideration as well as Form FC.)P8 ha*e to 3e su3mitted 3y the AD Cate2ory.I 3ank to the 8e2ional 0ffice concerned of the 8eser*e 1ank under whose &urisdiction the re2istered office of the com any is situated. %d' Annual return on Forei2n ?ia3ilities and Assets (Anne* 7# should 3e filed on an annual 3asis 3y the Indian com any" directly with the 8eser*e 1ank. This is an annual return to 3e su3mitted 3y 1-th of Quly e*ery year" ertainin2 to all in*estments 3y way of direct+ ortfolio in*estments+rein*ested earnin2s+other ca ital in the Indian com any made durin2 the re*ious years %i.e. the information su3mitted 3y 1- Quly will ertain to all the in*estments made in the re*ious years u to 7arch 51'. The details of the in*estments to 3e re orted would include all forei2n in*estments made into the com any which is outstandin2 as on the 3alance sheet date. The details of o*erseas in*estments in the com any 3oth under direct+ ortfolio in*estment may 3e se arately indicated. %e' Issue of 3onus+ri2hts shares or stock o tions to ersons resident outside India directly or on amal2amation+mer2er+demer2er with an eCistin2 Indian com any" as well as issue of shares on con*ersion of 6C1+royalty+lum sum technical know.how fee+im ort of ca ital 2oods 3y units in (6Ss, has to 3e re orted in Form FC.)P8. !.2.5 6eportin+ of transfer of s,ares 8e ortin2 of transfer of shares 3etween residents and non.residents and *ice. *ersa is to 3e done in Form FC.T8( %Anne* 5'. The Form FC.T8( should 3e su3mitted to the AD Cate2ory.I 3ank" within :# days from the date of recei t of the amount of consideration. The onus of su3mission of the Form FC.T8( within the 2i*en timeframe would 3e on the transferor+transferee" resident in India. The AD Cate2ory.I 3ank" would forward the same to its link office. The link office would consolidate the Form FC.T8( and su3mit a monthly re ort to the 8eser*e 1ank.
th

!=

!.2.$

6eportin+ of 4on-Cas, Details of issue of shares a2ainst con*ersion of 6C1 ha*e to 3e re orted to the 8e2ional 0ffice concerned of the 81I" as indicated 3elow/ %i' In case of full conversion of 6C1 into e@uity" the com any shall re ort the con*ersion in Form FC.)P8 to the 8e2ional 0ffice concerned of the 8eser*e 1ank as well as in Form 6C1.2 to the De artment of (tatistics and Information 7ana2ement %D(I7'" 8eser*e 1ank of India" 1andra.Durla Com leC" 7um3ai. $## #-1" within se*en workin2 days from the close of month to which it relates. The words I6C1 wholly con*erted to e@uityI shall 3e clearly indicated on to of the Form 6C1.2. 0nce re orted" filin2 of Form 6C1.2 in the su3se@uent months is not necessary. %ii' In case of partial conversion of 6C1" the com any shall re ort the con*erted ortion in Form FC.)P8 to the 8e2ional 0ffice concerned as well as in Form 6C1.2 clearly differentiatin2 the con*erted ortion from the non.con*erted ortion. The words I6C1 artially con*erted to e@uityI shall 3e indicated on to of the Form 6C1.2. In the su3se@uent months" the outstandin2 3alance of 6C1 shall 3e re orted in Form 6C1.2 to D(I7.

!.2.-

6eportin+ of FCC2HAD6HGD6 Issues The Indian com any issuin2 AD8s+)D8s has to furnish to the 8eser*e 1ank" full details of such issue in the Form enclosed as Anne* 3" within 5# days from the date of closin2 of the issue. The com any should also furnish a @uarterly return in the Form enclosed as Anne* 1!" to the 8eser*e 1ank within 1- days of the close of the calendar @uarter. The @uarterly return has to 3e su3mitted till the entire amount raised throu2h AD8+)D8 mechanism is either re atriated to India or utiliKed a3road as er the eCtant 8eser*e 1ank 2uidelines.

7)1

Ad,erence to GuidelinesH.rders and ConseGuences of 7iolation FDI is a ca ital account transaction and thus any *iolation of FDI re2ulations are co*ered 3y the enal ro*isions of the F67A. 8eser*e 1ank of India administers the F67A and Directorate of 6nforcement under the 7inistry of Finance is the authority for the enforcement of F67A. The Directorate takes u contra*ention of F67A. in*esti2ation in any

!.5.1

Penalties %i' If a erson *iolates+contra*enes any FDI 8e2ulations" 3y way of 3reach+non. adherence+non.com liance+contra*ention of any rule" re2ulation" notification" ress note" ress release" circular" direction or order issued in eCercise of the >#

owers under F67A or contra*enes any conditions su3&ect to which an authoriKation is issued 3y the )o*ernment of India+FIP1+8eser*e 1ank of India" he shall" u on ad&udication" 3e lia3le to a enalty u to thrice the sum in*ol*ed in such contra*entions where such amount is @uantifia3le" or u to two lakh 8u ees where the amount is not @uantifia3le" and where such contra*entions is a continuin2 one" further enalty which may eCtend to fi*e thousand 8u ees for e*ery day after the first day durin2 which the contra*entions continues. %ii' ;here a erson committin2 a contra*ention of any ro*isions of this Act or of any rule" direction or order made there under is a com any %com any means any 3ody cor orate and includes a firm or other association of indi*iduals as defined in the Com anies Act'" e*ery erson who" at the time the contra*ention was committed" was in char2e of" and was res onsi3le to" the com any for the conduct of the 3usiness of the com any as well as the com any" shall 3e deemed to 3e 2uilty of the contra*ention and shall 3e lia3le to 3e roceeded a2ainst and unished accordin2ly. %iii' Any Ad&udicatin2 Authority ad&ud2in2 any contra*entions under !.5.1%i'" may" if he thinks fit in addition to any enalty which he may im ose for such contra*ention direct that any currency" security or any other money or ro erty in res ect of which the contra*ention has taken lace shall 3e confiscated to the Central )o*ernment. !.5.2 Ad'udication and Appeals %i' For the ur ose of ad&udication of any contra*ention of F67A" the 7inistry of Finance as er the ro*isions contained in the Forei2n 6Cchan2e 7ana2ement %Ad&udication Proceedin2s and A eal' 8ules" 2### a oints officers of the ortunity has to 3e 2i*en to the erson Central )o*ernment as the Ad&udicatin2 Authorities for holdin2 an en@uiry in the manner rescri3ed. A reasona3le o alle2ed to ha*e committed contra*entions a2ainst whom a com laint has 3een made for 3ein2 heard 3efore im osin2 any enalty. %ii' The Central )o*ernment may a oint as er the ro*isions contained in the Forei2n 6Cchan2e 7ana2ement %Ad&udication Proceedin2s and A 2###" an A ellate Authority+ A ellate Tri3unal to hear a orders of the ad&udicatin2 authority. eal' 8ules" eals a2ainst the

>1

!.5.5

Compoundin+ Proceedin+s Jnder the Forei2n 6Cchan2e %Com oundin2 Proceedin2s' 8ules 2###" the Central )o*ernment may a oint GCom oundin2 AuthorityA an officer either from 6nforcement Directorate or 8eser*e 1ank of India for any erson contra*enin2 any ro*isions of the F67A. The Com oundin2 Authorities are authoriKed to com ound the amount in*ol*ed in the contra*ention to the Act made 3y the erson. ,o contra*ention shall 3e com ounded unless the amount in*ol*ed in such contra*ention is @uantifia3le. Any second or su3se@uent contra*ention committed after the eC iry of a eriod of three years from the date on which the contra*ention was re*iously com ounded shall 3e deemed to 3e a first contra*ention. The Com oundin2 Authority may call for any information" record or any other documents rele*ant to the com oundin2 roceedin2s. The Com oundin2 Authority shall ass an order of com oundin2 after affordin2 an o ortunity of 3ein2 heard to all the concerns as

eC editiously and not later than 1># days from the date of a lication made to the Com oundin2 Authority. Com oundin2 Authority shall issue order s ecifyin2 the ro*isions of the Act or of the rules" directions" re@uisitions or orders made there under in res ect of which contra*ention has taken lace alon2 with details of the alle2ed contra*entions.

>2

Annex-1 Form FC-GPR


(To be filed by the company through its Authorised Dealer Category I bank with the Regional Office of the R I under whose !urisdiction the Registered Office of the company making the declaration is situated as and when shares"con#ertible debentures " others are issued to the foreign in#estor$ along with the documents mentioned in item %o& ' 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 " con#ertible debentures"others Particulars (In Block Letters)

No.
1. Name of the Investee Company

A ress of the !egistere "ffice of the Investee Company #ith City$ District an %tate c&ear&y mentione

Te&ephone

'ax

e(mai&

%tate

!egistration No. given by !egistrar of Companies an Date of Incorporation.

>5

)hether existing company or ne# company (stri*e off #hichever is not app&icab&e) If existing company$ give registration number a&&otte by !-I for 'DI$ if any /. Description of the main business activity

+xisting company , Ne# company (-ro#nfie& ) ( .reenfie& )

NIC Co e

0ocation of the pro1ect an NIC co e for the istrict #here the pro1ect is &ocate

a)Detai&e a ress inc&u ing Name$ City$ District an %tate

b) Co e for District

c) Co e for %tate

Percentage of 'DI a&&o#e as per 'DI po&icy (%ectora& cap un er 'DI Po&icy)

%tate #hether 'DI is a&&o#e un er Automatic !oute or Approva& !oute (stri*e out #hichever is not app&icab&e) (If un er approva& route$ give %IA,'IP- approva& No. #ith ate)

Automatic !oute , Approva& !oute

>$

Details o t!e orei"n in#estor $ colla%orator (Details o orei"n resi'ence to %e "i#en. In'ian a''ress i an( s!oul' not %e "i#en) Name A ress

&

Country

Constitution , Nature of the investing +ntity 3%pecify #hether


1. In ivi ua& /. Company (P&ease specify if erst#hi&e "C-) 2. 'II # 4. '5CI 6. 'oreign Trust 7. Private +8uity 'un 9. Pension , Provi ent 'un 4 :. %overeign )ea&th 'un (%)') ;. Partnership , Proprietorship 'irm 1<. 'inancia& Institution 11. N!Is , PI" 1/. "thers (p&ease specify)=

Date of incorporation> Particulars o )!ares $ Con#erti%le De%entures $ot!ers Issue' 4 (a) Nature an' 'ate o issue %ature of issue <1 </ <2 <4 <6 <7 <9 IP" , 'P" Preferentia& a&&otment , private p&acement !ights -onus Conversion of +CConversion of roya&ty (inc&u ing &ump sum payments) Conversion against import Date of issue %umber of shares" con#ertible debentures"others

of capita& goo s by units in %+?

If there is more than one forei2n in*estor+colla3orator" se arate AnneC may 3e included for items 5 and $ o f the Form.

2 (;F means a )o*ernment in*estment *ehicle which is funded 3y forei2n eCchan2e assets" and which mana2es those assets se arately from the official reser*es of the monetary authorities.
#

The in*estment+s is+are made 3y FHCI under FDI (cheme in terms of (chedule I to ,otification ,o. F67A 2#+2###. 81 dated 7ay 5" 2###.

>-

<: <; 1<

+%"Ps %hare %#ap "thers (p&ease specify) *otal

(b)

*(+e o securit( issue'

No.

Nature o security

%umber

)aturity

*ace #alue

Premium

Issue +rice per security

Amount of inflow,

<1 </ <2

<4

+8uity Compu&sori&y Convertib&e Debentures Compu&sori&y Convertib&e Preference shares "thers (p&ease specify) *otal

i) In case the issue price is greater than the face va&ue p&ease give brea* up of the premium receive . ii) @ In case the issue is against conversion of +C- or roya&ty or against import of capita& goo s by units in %+?$ a Chartere AccountantAs Certificate certifying the amount outstan ing on the ate of conversion

(c)

Break u+ o +remium Contro& Premium Non competition fee B "thers *otal

Amount

+lease specify the nature ( ) *otal in lo, (in !upees) on account of issue of shares , convertib&e ebentures,others to non(resi ents (inc&u ing premium$ if any) vi e (i) !emittance through AD> (ii) Debit to N!+,'CN!,+scro# A,c #ith -an* (iii) "thers (p&ease specify) Date of reporting of (i) an (ii) above to !-I un er Para ; (1) A of %che u&e I to Notification No. '+CA /< ,/<<<(!- ate Cay 2$ /<<<$ as amen e from time to time.

>:

(e)

Disclosure o air #alue o s!ares issue'-)e are a &iste company an the mar*et va&ue of a share as on ate of the issue is@ )e are an un(&iste company an the fair va&ue of a share is@ ,(+lease indicate as applicable(

@@ before issue of shares 6. Post issue +attern o s!are!ol'in"

-.uity

Compulsorily con#ertible +reference /hares" Debentures"others


No. of shares D Amount ('ace D

No. of shares

a)

%) *otal

Non-Resi'ent .1 In'i#i'uals ./ Com+anies .& FIIs # .0 F1CIs .2 Forei"n *rusts .3 Pri#ate 45uit( Fun's .6 Pension$ Pro#i'ent Fun's .7 )o#erei"n 8ealt! Fun's .9 Partners!i+$ Pro+rietors!i+ Firms 1. Financial Institutions 11 NRIs$PI: 1/ :t!ers (+lease s+eci () )u% *otal Resi'ent

The in*estment+s is+are made 3y FHCI under FDI (cheme in terms of (chedule I to ,otification ,o. F67A 2#+2###.81 dated 7ay 5" 2###.

Amount ('ace

Investor category

>!

D4CLARA*I:N *: B4 FIL4D B; *<4 A=*<:RI)4D R4PR4)4N*A*I14 :F *<4 INDIAN C:>PAN;? (Delete whiche#er is not applicable and authenticate( )e hereby ec&are that> 1. )e comp&y #ith the proce ure for issue of shares , convertib&e ebentures as &ai o#n un er r the 'DI scheme as in icate in Notification No. '+CA /<,/<<<(!- ate 2 Cay /<<<$ as amen e from time to time. /. The investment is #ithin the sectora& cap , statutory cei&ing permissib&e un er the Automatic !oute of !-I an #e fu&fi& a&& the con itions &ai o#n for investments un er the Automatic !oute name&y (stri*e off #hichever is not app&icab&e).

a) %hares issue on rights basis to non(resi ents are in conformity #ith !egu&ation 7 of the r !-I Notification No '+CA /<,/<<<(!- ate 2 Cay /<<<$ as amen e from time to time. :R b) %hares issue are bonus. :R c) %hares have been issue un er a scheme of merger an ama&gamation of t#o or more In ian companies or reconstruction by #ay of e(merger or other#ise of an In ian company$ u&y approve by a court in In ia. :R

)%hares are issue un er +%"P an the con itions regar ing this issue have been satisfie 2. %hares have been issue in terms of %IA ,'IP- approva& No. ate

4 The foreign investment receive an reporte no# #i&& be uti&iEe in comp&iance #ith the provision of a Prevention of Coney 0aun ering Act /<</ (PC0A) an Fn&a#fu& Activities(Prevention) Act$ 1;79 (FAPA). )e confirm that the investment comp&ies #ith the provisions of a&& app&icab&e !u&es an !egu&ations 6. )e enc&ose the fo&&o#ing ocuments in comp&iance #ith Paragraph ; (1) (-) of %che u&e 1 to Notification No. '+CA /<,/<<<(!- ate Cay 2$ /<<<> (i) A certificate from our Company %ecretary certifying that

>>

(a) (b)

(ii)

a&& the re8uirements of the Companies Act$ 1;67 have been comp&ie #ithG terms an con itions of the .overnment approva&$ if any$ have been comp&ie #ithG (c) the company is e&igib&e to issue shares un er these !egu&ationsG an ( ) the company has a&& origina& certificates issue by authorise ea&ers in In ia evi encing receipt of amount of consi eration in accor ance #ith paragraph : of %che u&e 1 to Notification No. '+CA /<,/<<<(!- ate Cay 2$ /<<<. A certificate from %+-I registere Cerchant -an*er , Chartere Accountant in icating the manner of arriving at the price of the shares issue to the persons resi ent outsi e In ia.

7. Fni8ue I entification Numbers given for a&& the remittances receive as consi eration for issue of shares, convertib&e ebentures,others ( etai&s as above)$ by !eserve -an*.

! . . . !

(%ignature of the App&icant)@ > (Name in -&oc* 0etters) >

(Designation of the signatory) > P&ace> Date> (@ To be signe by Canaging Director,Director,%ecretary of the Company)

>=

C4R*IFICA*4 *: B4 FIL4D B; *<4 C:>PAN; )4CR4*AR; :F *<4 INDIAN C:>PAN; ACC4P*ING *<4 IN14)*>4N*? (As per +ara 0 (1( ( ( (i( of /chedule 1 to %otification %o& *-)A 23"23334R dated )ay 5$ 2333( In respect of the abovementione etai&s$ #e certify the fo&&o#ing >

1. A&& the re8uirements of the Companies Act$ 1;67 have been comp&ie #ith. /. Terms an con itions of the .overnment approva&$ if any$ have been comp&ie #ith. 2. The company is e&igib&e to issue shares , convertib&e ebentures,others un er these !egu&ations. 4. The company has a&& origina& certificates issue by AD Category H I ban*s in In ia$ evi encing receipt of amount of consi eration in accor ance #ith paragraph : of %che u&e 1 to Notification No. '+CA /<,/<<<(!- ate Cay 2$ /<<<.

(Name I %ignature of the Company %ecretary) (%ea&)

F:R =)4 :F *<4 R4)4R14 BAN@ :NL;? Re"istration Num%er or t!e FC-GPR? =ni5ue I'enti ication Num%er allotte' to t!e Com+an( at t!e time o re+ortin" recei+t remittance o

If the com any doesnAt ha*e full time Com any (ecretary" a certificate from racticin2 Com any (ecretary may 3e su3mitted

=#

Anne* Derms and conditions for Dransfer of %,ares HConverti&le De&entures, &y <ay of %ale, from a Person 6esident in India to a Person 6esident .utside India and from a Person 6esident .utside India to a Person 6esident in India 1)1 In order to address the concerns relatin2 to ricin2" documentation" ayment+ recei t and remittance in res ect of the shares+ con*erti3le de3entures of an Indian com any" in all sectors" transferred 3y way of sale" the arties in*ol*ed in the transaction shall com ly with the 2uidelines set out 3elow. 1) Parties involved in t,e transaction are %a' seller %resident+non.resident'" %3' 3uyer %resident+non.

resident'" %c' duly authoriKed a2ent+s of the seller and+or 3uyer" %d' Authorised Dealer 3ank %AD' 3ranch and %e' Indian com any" for recordin2 the transfer of ownershi in its 3ooks. ) i. ii. Pricin+ Guidelines lica3le to the followin2 ty es of transactions/ Transfer of shares" 3y way of sale under ri*ate arran2ement 3y a erson resident in India to a erson Transfer of shares" 3y way of sale under ri*ate arran2ement 3y a erson resident outside India to a

)1 The under noted ricin2 2uidelines are a resident outside India. erson resident in India.

iii. 6Cit 3y non.resident in*estor on eCercisin2 o tion+ri2ht in shares or con*erti3le de3entures ) Dransfer &y 6esident to 4on-resident %i.e. to forei2n national" ,8I" FII" FPI and incor orated non. resident entity other than erstwhile 0C1' Price of shares transferred 3y way of sale 3y resident to a non. resident where the shares of an Indian com any are/ %a' listed on a reco2niKed stock eCchan2e in India "shall not 3e less than the rice at which the referential allotment of shares can 3e made under the (61I 2uidelines " as a f urchase or sale of shares" %3' not listed on a reco2niKed stock eCchan2e in India "shall not 3e less than the fair *alue to 3e determined 3y a (61I re2istered 7erchant 1anker or a Chartered Accountant as er the discounted free cash flow method. The rice er share arri*ed at should 3e certified 3y a (61I re2istered 7erchant 1anker or a Chartered Accountant. )1 Dransfer &y 4on-resident %i.e. 3y incor orated non.resident entity" erstwhile 0C1" forei2n national" ,8I" FII" FPI' to 6esident (ale of shares 3y a non.resident to resident shall 3e in accordance with 8e2ulation 1# 1 %2' of ,otification ,o. F67A 2#+2###.81 dated 7ay 5" 2### which shall not 3e more than the minimum rice at which the transfer of shares can 3e made from a resident to a non.resident as 2i*en at ara 2.2 a3o*e. )" lica3le" ro*ided the same is determined for such duration as s ecified therein" recedin2 the rele*ant date" which shall 3e the date

After the lock.in eriod" as a lica3le a3o*e" and su3&ect to FDI Policy ro*isions" if any" in this re2ard" the non.resident in*estor eCercisin2 o tion+ri2ht in shares or con*erti3le de3entures issued =1

under FDI (cheme shall 3e eli2i3le to eCit without any assured return" as er ricin2+*aluation 2uidelines issued 3y 81I from time to time.
1) 6esponsi&ilities H .&li+ations of t,e parties arties in*ol*ed in the transaction would ha*e the res onsi3ility to ensure that the rele*ant

All the

re2ulations under F67A are com lied with and conse@uent on transfer of shares" the rele*ant indi*idual limit+sectoral ca s+forei2n e@uity artici ation ceilin2s as fiCed 3y )o*ernment are not 3reached. (ettlement of transactions will 3e su3&ect to ayment of a ") lica3le taCes" if any.

Met,od of payment and remittanceHcredit of sale proceeds

$.1 The sale consideration in res ect of the shares urchased 3y a erson resident outside India shall 3e remitted to India throu2h normal 3ankin2 channels. In case the 3uyer is a FII"FPI" ayment should 3e made 3y de3it to its ( ecial ,on.8esident 8u ee Account. In case the 3uyer is a ,8I" the ayment may 3e made 3y way of de3it to his ,86+FC,8 %1' accounts. 9owe*er" if the shares are ac@uired on non.re atriation 3asis 3y ,8I" the consideration shall 3e remitted to India throu2h normal 3ankin2 channel or aid out of funds held in ,86+FC,8 %1'+,80 accounts. $.2. The sale roceeds of shares %net of taCes' sold 3y a erson resident outside India may 3e remitted outside India. In case of FII+FPI" the sale roceeds may 3e credited to its s ecial ,on.8esident 8u ee Account. In case of ,8I" if the shares sold were held on re atriation 3asis" the sale roceeds %net of taCes' may 3e credited to his ,86 +FC,8%1' accounts and if the shares sold were held on non re atriation 3asis" the sale roceeds may 3e credited to his ,80 account su3&ect to ayment of taCes. $.5 The sale roceeds of shares %net of taCes' sold 3y an 0C1 may 3e remitted outside India directly if the shares were held on re atriation 3asis and if the shares sold were held on non.re atriation 3asis" the sale roceeds may 3e credited to its ,80 %Current' Account su3&ect to ayment of taCes" eCce t in the case of 0C1s whose accounts ha*e 3een 3locked 3y 8eser*e 1ank. /) Documentation 1esides o3tainin2 a declaration in the enclosed Form FC.T8( %in @uadru licate'" the AD 3ranch should arran2e to o3tain and kee on record the followin2 documents/ /)1 For sale of s,ares &y a person resident in India i. Consent ?etter duly si2ned 3y the seller and 3uyer or their duly a ointed a2ent indicatin2 the details of transfer i.e. num3er of shares to 3e transferred" the name of the in*estee com any whose shares are 3ein2 transferred and the rice at which shares are 3ein2 transferred. In case there is no formal (ale A2reement" letters eCchan2ed to this effect may 3e ke t on record. ii. ;here Consent ?etter has 3een si2ned 3y their duly a ointed a2ent" the Power of Attorney Document eCecuted 3y the seller+3uyer authoriKin2 the a2ent to urchase+sell shares.

=2

iii.

The shareholdin2 attern of the in*estee com any after the ac@uisition of shares 3y a erson resident outside India showin2 e@uity artici ation of residents and non.residents cate2ory.wise %i.e. ,8Is+0C1s+forei2n nationals+incor orated non.resident entities+FIIs"FPIs' and its ercenta2e of aid u ca ital o3tained 3y the seller+3uyer or their duly a where the sectoral ca +limits ha*e 3een rescri3ed. ointed a2ent from the com any"

i*. *. *i. *ii.

Certificate indicatin2 fair *alue of shares from a Chartered Accountant. Co y of 1rokerAs note if sale is made on (tock 6Cchan2e Jndertakin2 from the 3uyer to the effect that he is eli2i3le to ac@uire shares+ con*erti3le de3entures under FDI olicy and the eCistin2 sectoral limits and Pricin2 )uidelines ha*e 3een com lied with. Jndertakin2 from the FII+su3 account to the effect that the indi*idual FII+ (u3 account ceilin2 as rescri3ed 3y (61I has not 3een 3reached" till it 2ets re2istered as FPI.

/) ) i.

For sale of s,ares &y a person resident outside India Consent ?etter duly si2ned 3y the seller and 3uyer or their duly a ointed a2ent indicatin2 the details of transfer i.e. num3er of shares to 3e transferred" the name of the in*estee com any whose shares are 3ein2 transferred and the rice at which shares are 3ein2 transferred.

ii.

;here the Consent ?etter has 3een si2ned 3y their duly a

ointed a2ent the Power of Attorney

Document authoriKin2 the a2ent to urchase+sell shares 3y the seller+3uyer. In case there is no formal (ale A2reement" letters eCchan2ed to this effect may 3e ke t on record. iii. If the sellers are ,8Is+0C1s" the co ies of 81I a re atriation+non.re atriation 3asis. The sale a i*. *. *i. 0) :.1 lica3le. ro*als e*idencin2 the shares held 3y them on roceeds shall 3e credited ,86+,80 account" as

Certificate indicatin2 fair *alue of shares from a Chartered Accountant. ,o 03&ection + TaC Clearance Certificate from Income TaC authority+Chartered Account. Jndertakin2 from the 3uyer to the effect that the Pricin2 )uidelines ha*e 3een adhered to. 8e ortin2 of transfer of shares 3etween residents and non.residents and *ice *ersa is to 3e done in

6eportin+ reGuirements

Form FC.T8(. The Form FC.T8( should 3e su3mitted to the AD Cate2ory.I 3ank" within :# days from the date of recei t of the amount of consideration. The onus of su3mission of the Form FC.T8( within the 2i*en timeframe would 3e on the transferor + transferee" resident in India. The AD Cate2ory.I 3ank" would forward the same to its link office. The link office would consolidate the Forms and su3mit a monthly re ort to the 8eser*e 1ank . For the ur ose the AuthoriKed Dealers may desi2nate 3ranches to s ecifically handle such transactions. These 3ranches could 3e staffed with ade@uately trained staff for this ur ose to ensure that the transactions are ut throu2h smoothly. The ADs may also desi2nate a nodal office to coordinate the work at these 3ranches and also ensure the re ortin2 of these transactions to the 8eser*e 1ank.
:

To the Chief .enera& Canager(in(Charge$ !eserve -an* of In ia$ 'oreign +xchange Department$ 'oreign Investment Division$ Centra& "ffice$ Cumbai

=5

0)

;hen the transfer is on ri*ate arran2ement 3asis" on settlement of the transactions" the transferee+his ointed a2ent should a roach the in*estee com any to record the transfer in their 3ooks alon2 with

duly a

the certificate in the Form FC.T8( from the AD 3ranch that the remittances ha*e 3een recei*ed 3y the transferor+ ayment has 3een made 3y the transferee. 0n recei t of the certificate from the AD" the com any may record the transfer in its 3ooks. 0)1 The actual inflows and outflows on account of such transfer of shares shall 3e re orted 3y the AD 3ranch in the 8.returns in the normal course. 0)" In addition the AD 3ranch should su3mit two co ies of the Form FC.T8( recei*ed from their constituents+customers to2ether with the statement of inflows+outflows on account of remittances recei*ed+made in connection with transfer of shares" 3y way of sale" to I1D+F6D+or the nodal office desi2nated for the ur ose 3y the 3ank in the enclosed roforma %which is to 3e re ared in 7(.6Ccel format'. The I1D+F6D or the nodal office of the 3ank will in turn su3mit a consolidated monthly statement in res ect of all the transactions re orted 3y their 3ranches to2ether with co ies of the FC.T8( Forms recei*ed from their 3ranches to Forei2n 6Cchan2e De artment" 8eser*e 1ank" Forei2n In*estment Di*ision" Central 0ffice" 7um3ai in soft co y %in 7(. 6Ccel' 3y e.mail to fdidataZr3i.or2.in 0)/ (hares urchased + sold 3y FIIs+FPIs under ri*ate arran2ement will 3e 3y de3it +credit to their ( ecial ,on.8esident 8u ee Account. Therefore" the transaction should also 3e re orted in Form ?6C 3y the desi2nated 3ank of the FII+FPI concerned. 0)0 0)7 (hares+con*erti3le de3entures of Indian com anies urchased under Portfolio In*estment (cheme 3y 0n recei t of statements from the AD" the 8eser*e 1ank may call for such additional details or 2i*e ,8Is" 0C1s cannot 3e transferred" 3y way of sale under ri*ate arran2ement. such directions as re@uired from the transferor+transferee or their a2ents" if need 3e.

=$

Anne*- 1
Documents to &e su&mitted &y a person resident in India for transfer of s,ares to a person resident outside India &y <ay of +ift i. ii. iii. i*. ,ame and address of the transferor %donor' and the transferee %donee'. 8elationshi 3etween the transferor and the transferee. 8easons for makin2 the 2ift. In case of )o*ernment dated securities and treasury 3ills and 3onds" a certificate issued 3y a Chartered Accountant on the market *alue of such security. *. In case of units of domestic mutual funds and units of 7oney 7arket 7utual Funds" a certificate from the issuer on the ,et Asset Halue of such security. *i. In case of shares and con*erti3le de3entures" a certificate from a Chartered Accountant on the *alue of such securities accordin2 to the 2uidelines issued 3y (ecurities B 6Cchan2e 1oard of India or DCF method for listed com anies and unlisted com anies" res ecti*ely. *ii. Certificate from the concerned Indian com any certifyin2 that the ro osed transfer of shares+ con*erti3le de3entures 3y way of 2ift from resident to the non.resident shall not 3reach the a lica3le sectoral ca + FDI limit in the com any and that the ro osed num3er of shares+con*erti3le de3entures to 3e held 3y the non.resident transferee shall not eCceed - er cent of the aid u ca ital of the com any. *iii. An undertakin2 from the resident transferor that the *alue of security to 3e transferred to2ether with any security already transferred 3y the transferor" as 2ift" to any erson residin2 outside India does not eCceed the ru ee e@ui*alent of J(D -#"### durin+ a financial yearM. [ 81IAs A.P. %DI8 (eries' Circular ,o. 1$ Dated 1-.#=.2#11

=-

Anne* - "

Definition of NrelativeN as +iven in %ection 0 of Companies Act, 13/0) A erson shall 3e deemed to 3e a relati*e of another" if" and only if/ %a' they are mem3ers of a 9indu undi*ided family L or %3' they are hus3and and wife L or %c' the one is related to the other in the manner indicated in (chedule IA %as under'
1. Father. 2. 7other %includin2 ste .mother'. 5. (on %includin2 ste son'. $. (on4s wife. -. Dau2hter %includin2 ste .dau2hter'. :. Father4s father. !. Father4s mother. >. 7other4s mother. =. 7other4s father. 1#. (on4s son. 11. (on4s son4s wife. 12. (on4s dau2hter. 15. (on4s dau2hter4s hus3and. 1$. Dau2hter4s hus3and. 1-. Dau2hter4s son. 1:. Dau2hter4s son4s wife. 1!. Dau2hter4s dau2hter. 1>. Dau2hter4s dau2hter4s hus3and. 1=. 1rother %includin2 ste .3rother'. 2#. 1rother4s wife. 21. (ister %includin2 ste .sister'. 22. (ister4s hus3and. [[[[[[[[[[[[[[[[[[[[[[[[[[[[[

=:

Anne* - /
6eport &y t,e Indian company receivin+ amount of consideration for issue of s,ares H Converti&le de&entures under t,e FDI %c,eme ( To be filed b the compan through its !uthorised Dealer Categor -I ban"# with the $egional %ffice of the $eserve &an" under whose 'urisdiction the $egistered %ffice of the compan ma"ing the declaration is situated# not later than () da s from the date of receipt of the amount of consideration# as specified in para * (I) (!) of +chedule I to ,otification ,o. -./! 0)10)))- $& dated /a (# 0))) ) Permanent Account ,um3er %PA,' of the in*estee com any 2i*en 3y the IT De artment

4o) 1.

Particulars ,ame of the Indian com any Address of the 8e2istered 0ffice

(In 2loc9 @etters#

FaC Tele hone e.mail Details of t,e forei+n investorH colla&orator ,ame Address

5. $.

Country Date of recei t of funds Amount

In forei2n currency

In Indian 8u ees

-.

;hether in*estment is under Automatic Automatic 8oute + A ro*al 8oute 8oute or A ro*al 8oute If A ro*al 8oute" 2i*e details %ref. no. of a ro*al and date' ,ame of the AD throu2h whom the remittance is recei*ed Address of the AD

:. !.

=!

A Co y of the FI8C e*idencin2 the recei t of consideration for issue of shares+ con*erti3le de3entures as a3o*e is enclosed.

%Authorised si2natory of the in*estee com any' %(tam '

%Authorised si2natory of the AD' %(tam '

F.6 >%E .F D=E 6E%E67E 2A4L .4@O( >niGue Identification 4um&er for t,e remittance received(

=>

Anne* I 0 Lno< Oour Customer (LOC# Form in respect of t,e non-resident investor 8e2istered ,ame of the 8emitter + In*estor %,ame" if the in*estor is an Indi*idual' 8e2istration ,um3er %Jni@ue Identification ,um3erM in case remitter is an Indi*idual' 8e2istered Address %Permanent Address if remitter Indi*idual' ,ame of the 8emitterAs 1ank 8emitterAs 1ank Account ,o. Period of 3ankin2 relationshi with the remitter M Pass ort ,o." (ocial (ecurity ,o" or any Jni@ue ,o. certifyin2 the 3onafides of the remitter
as re*alent in the remitterAs 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.

%(i2nature of the Authorised 0fficial of the AD 3ank recei*in2 the remittance' Date / (tam / Place/

Anne* I 7

6E%E67E 2A4L .F I4DIA


Annual Return on Forei"n Lia%ilities an' Assets as on &1 >arc!A /. B B % 8eturn t o 3e f i l led u n d e r A . P . %D I 8 ( erie s ' Circular , o . dated and su3mitted to the De artment of (tatistics and Information 7ana2ement" 81I" 7um3ai' +lease read the guidelines"definitions carefully before filling4in the Return %8es ondents are encoura2ed to su3mit the e.form of this return" which can 3e downloaded from the F67A Forms section under the GFormsA cate2ory on the 81I we3site" ###.rbi.org.in The e.form is easy.to.fill with user 2uidance and consistency checks. The duly filled.in e.form should 3e emailed.
'

1) 4ame and Address of t,e Indian Company( , a m e o f t h e C o m a n y / Address/


City/ (tate/ Pin/ . PA, ,um3er of Com any 2i*en 3y Income TaC De artment (1! di+it#
1. CI, ,um3er allotted 3y 7inistry of Cor . Affairs" )o*t. of India ( 1 di+it#

") Contact Details


Contact Person ,ame/ Desi2nation/ Tele hone ,o/ FaC/ e.mail/

B8P -1F As ;e3. (ite %if any'/

-. Account closin2 date (DDHMMHOOOO# :. ,ature of 1usiness/ (As per 4ational Industrial Classification (4IC# !!5 Code# 7) ;hether your Com any ,ame has chan2ed durin2 the last financial year %A ril . 7arch' (OH4#< If yes" lease s ecify the Com any4s old ,ame Com any4s old ,ame/ 6ffecti*e Date (DDHMMHOOOO# 5. ;hether the Com any is listed (OH4#< If yes" lease furnish the share rice on closin2 date of reference eriod Face Halue % Per (hare' 7arket Halue %Per (hare' ?atest 7arch Pre*ious 7arch ?atest 7arch 0rdinary+6@uity (hare

3)

Identification of the re ortin2 Com any (in terms of in<ard FDI# (a# %u&sidiary of Forei+n entity (&# Associate of forei+n entity (c# Pu&lic Private Partners,ip (d# %pecial Purpose 7e,icle (d#.t,er

1#. ;hether the Com any is Asset 7ana2ement Com any (OH4#< 11. ;hether the Com any has Technical Forei2n colla3oration (OH4#<

12. ;hether the com any has any 3usiness acti*ity durin2 the last financial year %A ril . 7arch' (OH4#<

%ection II (Financial Details# 2loc9 1( Financial Detail of 6eportin+ Company


CARE: Information should 3e re orted for all the reference eriod" i.e. Pre*ious 7arch and ?atest 7arch. If re ortin2 eriod is different from Account Closin2 Period" then information should 3e 2i*en on internal assessment

2loc9 1A( Total Paid. u Com any/ Item

Ca ital of Indian
End-of Previous Marc, 4um&er of %,ares in actual Amount in 6s la9, End-of @atest Marc, 4um&er of %,ares in actual Amount in 6s la9,

1)! Dotal Paid-up Capital (P 1)1 Q 1) # 1)1 Dotal EGuity $ Participatin+ P r ef e re n c e % , a re ca pi t al (P 1)1(a# Q 1)1(&## (a# .rdinaryHEGuity %,areM (&# Participatin+ Preference %,are 1) 4on-participatin+ Preference %,areR

)! 4on-resident =oldin+s (at face value in 6s la9,#


)1 EGuity $ Participatin+ Preference s,are capital (%um of item-1 to item-1 #

1 Indi*iduals 2 Com anies 5 Forei2n Institutional In*estors %FIIs' $ Forei2n Henture Ca ital In*estors %FHCIs' - Forei2n Trusts : Pri*ate 6@uity Funds ! Pension+ Pro*ident Funds > (o*erei2n ;ealth Fund %(;F' = Partnershi + Pro rietorshi firms 1# Financial Institutions 11 ,8Is+PI0 12 0thers non.resident holdin2s ) 4on-Participatin+ Preference s,are

1)! 4on 6esident EGuity $ Participatin+ Preference s,are capital J


ote [In case of different class of 6@uity (hare %class A" class 1 etc.'" consolidated fi2ure should 3e re orted. \,on. artici atin2 Preference (hare do not ha*e followin2 ri2hts. %a' to recei*e di*idend" out of sur lus rofit after ayin2 the di*idend to e@uity shareholders. %3' to ha*e share in sur lus assets remainin2 after the entire ca ital is aid in case of windin2 u of the com any.

2loc9 12( Profit and ?oss Account (from PH@ Account#


Amount in 6s la9,

Item
5.1Profit %Y' +?oss %.' 3efore taC (Durin+ t,e Oear# 5.2 Profit %Y' + ?oss %.' after taC (Durin+ t,e Oear# 5.5 Di*idend %Interim B Final Di*idend' 5.$ TaC on Di*idend %if any' 1)/ 6etained Profit (P 1) - 1)1 - 1)"#

Previous Oear (April - Marc,#

@atest Oear (April - Marc,#

2loc9 1C( 8eser*es B (ur lus (from 2alance %,eet#


Amount in 6s la9, as at t,e end of

Item $.1 8eser*es (E*cludin+ Profit and @oss account &alance# $.2 Profit %Y' and ?oss %.' account 3alance $.5 8eser*e and (ur lus %N $.1 Y $.2' $.$ ,et worth of Com any % N 1.1 Y $.5'

Previous Marc,

@atest Marc,

2loc9 1D( (ales and Purchase made durin2 the Financial Eear
ote: To 3e filled in 3y com any where sin2le forei2n direct in*estor holdin2 is more than -#R in total e@uity %i.e. If re ortin2 Indian com any is su3sidiary of Forei2n com any'.

Amount in 6s la9, (Durin+ t,e year#

Item
Previous Marc, @atest Marc,

-.1 Domestic (ales -.2 6C orts -.5 Total (ales % N -.1Y -.2' -.$ Domestic urchase -.- Im orts -.: Total Purchase % N -.$ Y -.-'

%ection III (F.6EIG4 @IA2I@IDIE%#


CARE: Information should 3e re orted for all the reference eriod" i.e. Pre*ious 7arch and ?atest 7arch. If re ortin2 eriod is different from Account Closin2 Period" then information should 3e 2i*en on internal assessment.

) Investments made in India(


%i' In case of listed companies, e@uity should 3e *alued usin+ s,are price on closin+ date of reference period. %ii' In case of unlisted companies, .<n Fund of 2oo9 7alue (.F27# Met,od should 3e used.

2loc9A(
Investment in India under Forei+n Direct Investment (FDI# sc,eme (1!J or more EGuity Participation#) TPlease furnish here the outstandin2 in*estments made under the FDI (cheme in India 3y ,on.resident Direct in*estors" who were individually ,oldin+ 1! per cent or more ordinary+e@uity B reference shares of your com any on the re ortin2 dateU
EGuity $ Participatin+ Preference s,are capital ,oldin+ per cent as at t,e end of latest year (J#

4ame of t,e nonresident CompanyH Individual

Dype of Capital

Country of nonresident investor

Amount in 6s la9, as at t,e end of

Previous Marc,

@atest Marc,

1)! EGuity Capital % N 1.1 . 1.2' 1.1 ?ia3ilities to Direct In*estor 1.2 Claims on Direct In*estor %8e*erse in*estment' )! .t,er Capital R % N 2.1 . 2.2 ' 2..1 ?ia3ilities to Direct 2.2 Claims on Direct In*estor

ote/ %i' If the information is to 3e furnished for more than one in*estor" then add se arate 1lock with same format (ii# \/ 0ther ca ital" item 2.1 B 2.2 of 1lock.2A includes all other lia3ilities and claims at ,ominal *alue" eCce t e@uity and artici atin2 reference shares" %i.e. trade credit" loan" de3entures" ,on. artici atin2 share ca ital" other accounts recei*a3le and aya3les etc.' of Indian re ortin2 com any with its director investor indicated in 2loc9- A)

2loc9 2(

Investment in India under Forei+n Direct Investment (FDI# sc,eme (@ess t,an 1!J EGuity =oldin+#

TPlease furnish here the outstandin2 in*estments made under the FDI (cheme in India 3y ,on.resident Direct in*estors" who were indi*idually holdin2 less 1# than er cent ordinary+e@uity and artici atin2 reference shares of your com any on the re ortin2 dateU.

Country-<ise consolidated information s,ould &e provided &elo<( Country of non-resident investor
EGuity $ Participatin+ Preference s,are capital ,oldin+ per cent as at t,e end of latest year (J# Amount in 6s la9, as at t,e end of

Dype of Capital

Previous Marc,

@atest Marc,

1)! EGuity Capital % N 1.1.1.2' 1.1 ?ia3ilities to Direct In*estor 1.2 Claims on Direct In*estor %8e*erse in*estment' )! .t,er Capital % N 2.1.2.2' R 2.1 ?ia3ilities to Direct In*estor 2.2 Claims on Direct In*estor ote: !i" If the information is to 3e furnished for more than one country" then add se arate 1lock with same format. (ii# \/ 0ther ca ital" item 2.1 B 2.2 of 1lock.21 includes all other lia3ilities and claims at ,ominal *alue" eCce t e@uity and artici atin2 reference shares" %i.e. trade credit" loan" de3entures" ,on. artici atin2 share ca ital" other accounts recei*a3le and aya3les etc.' of Indian re ortin2 com any with non-resident investors ,oldin+ less t,an 1! per cent eGuity and related parties)

C) Portfolio India

Investment

in

Please furnish here the outstandin2 in*estments 3y non.resident in*estors" other than those made under Forei2n Direct In*estment (cheme in India %i.e. other than those re orted in 1lock.2A B 1lock. 21'.

Portfolio Investment

EGuity $ Participatin+ Preference s,are capital ,oldin+ per cent as at t,e end of latest year (J#

Amount in 6s la9, as at t,e end of

Previous Marc,

@atest Marc,

1)! EGuity %ecurities %at 7arket Halue' )! De&t %ecurities % N2.1Y2.2' 2.1 7oney 7arket Instruments %ori2inal maturity u to1year' 2.2 1onds and 0ther instruments %ori2inal maturity more than 1year' Please ensure t,at 4on-resident EGuity $ Participatin+ Preference s,are capital mentioned at item )1 of &loc9 1(A# s,ould &e reported in eit,er 2loc9- A or 2loc9- 2 or 2loc9- C at Mar9et 7alue i)e) sum of eGuity J in 2loc9- A, 2loc9- 2 $ 2loc9- C must &e eGual to t,e item 1)! of 2loc9-1A for t,e latest marc,)

%ection I7 (F.6EIG4 A%%ED%#


1) Please use the e*c,an+e rate as at end-Marc, Previous FO and end-Marc, @atest FO %as a lica3le' of re ortin2 year while re ortin2 the forei+n Assets in 6s la9,. ) If o*erseas com any is listedL e@uity should 3e *alued usin2 share rice on closin2 date of reference period) 1) If o*erseas com any is unlisted, .<n Fund of 2oo9 7alue (.F27' 7ethod should 3e used for *aluation of e@uity investment) 2loc9-1( EGuity Capital, 6eserves $ %urplus of Direct Investment Enterprise (DIE# A&road (1!J or more eGuity ,oldin+ &y Indian 6eportin+ company# TPlease re ort here the total e@uity of DI6" eGuity ,eld &y your company" reser*es %eCcludin2 PB? Account' and PB? Account of those DI6s in each of which your com any hold 1#R or more e@uity shares on the reference date.U Amount in Forei+n Currency 4ame of t,e as at t,e end of (in actual# Currency Item DIE
Previous Marc, @atest Marc,

5.1 Total 6@uity of DI6 5.2 6@uity of DI6 held 3y you 5.5 8eser*es %6Ccludin2 PB? Account' 5.$ Profit and ?oss Account 3alance 5.- 8eser*e and (ur lus % N5.5Y5.$' 5.: ,et ;orth of DI6 % N5.1Y5.-' 5.! 6Cchan2e rate in 8s er unit forei2n currency[ [/ 6Cchan2e rate of re ortin2 forei2n currency a2ainst Indian 8s should 3e 2i*en as on closin2 date of reference eriod. F6DAI we3site %htt /++www.fedai.or2.in' may 3e used for 6Cchan2e rates. 2loc9-"( Direct Investment A&road under .verseas Direct Investment (.DI# %c,eme 2loc9-"A( Direct Investment A&road (1!J or more eGuity ,oldin+# Please furnish here the market *alue of outstandin2 in*estments in DI6" made 3y your com any under the 0DI (cheme" in each of which your com any hold 1#R or more e@uity shares on the reference date.
EGuity ,oldin+ per cent as at t,e end of latest year (J# Amount in 6s la9, as at t,e end of Previous Marc, @atest Marc,

4ame of t,e nonresident DIE

Dype of Capital 1)! EGuity Capital %N1.1.1.2'

Country of nonresident DIE

1. 1Claims on Direct In*estment 6nter rise 1.2 ?ia3ilities to Direct In*estment 6nter rise in*estment' )! %8e*erse .t,er Capital % N2.1.2.2' R 2.1 Claims on Direct In*estment 6nter rise 2.2 ?ia3ilities to Direct In*estment 6nter rise

4ote( %i' If the information is to 3e furnished for more than one o*erseas com any" then ADD se arate 1lock 5 and 1lock $A with the same format.

(ii# R/ 0ther ca ital" item 2.1 B 2.2 of 1lock.$A includes all other lia3ilities and claims at ,ominal *alue" eCce t e@uity shares" %i.e. trade credit" loan" de3entures" ,on. artici atin2 share ca ital" other accounts recei*a3le and aya3les etc.' of Indian re ortin2 com any with its DI6 re orted in 2loc9-"A) 2loc9-"2( Direct Investment A&road (@ess t,an 1!J eGuity ,oldin+#) Please furnish here the market *alue of outstandin2 in*estments in DI6" made 3y your com any under the 0DI (cheme" in each of which your com any hold less than 1# R e@uity shares on the reference date.
EGuity ,oldin+ per cent as at t,e end of latest year (J# Amount in 6s la9, as at t,e end of Previous Marc, @atest Marc,

Dype of Capital

Country of nonresident DIE

1)! EGuity Capital %N1.1.1.2' 1. 1Claims on Direct In*estment 6nter rise 1.2 ?ia3ilities to Direct In*estment 6nter rise %8e*erse in*estment' )! .t,er Capital %N2.1.2.2' R 2.1 Claims on Direct In*estment 6nter rise 2.2 ?ia3ilities to Direct In*estment 6nter rise

4ote/ %i' If the information is to 3e furnish for more than one country" then use the ADD 1lock $1 with the same format. (ii# R / 0ther ca ital" item 2.1 B 2.2 of 1lock.$1 includes all other lia3ilities and claims at ,ominal *alue" eCce t e@uity" %i.e. trade credit" loan" de3entures" ,on. artici atin2 share ca ital" other accounts recei*a3le and aya3les etc.' of Indian re ortin2 com any with non-resident companies <,ere Indian company ,olds less t,an 1! per cent eGuity and also <it, related parties.

2loc9-/( Portfolio Investment A&road Please furnish here the market *alue of outstandin2 in*estments in non.resident enter rises" ot,er t,an t,ose made under .DI sc,eme reported in 2loc9-")
Amount in 6s la9, as at t,e end of Previous Marc, @atest Marc,

Portfolio Investment

Country of non-resident enterprise

1)! EGuity %ecurities (at Mar9et 7alue# )! De&t %ecurities %N2.1Y2.2' 2.1 7oney 7arket Instruments %ori2inal maturity u to1 year' 2.2 1onds and 0ther instruments %ori2inal maturity more than 1 year'
4ote( %i' Country wise consolidated information ertainin2 to each ty e of in*estment should 3e re orted se arately. %ii' If the information is to 3e furnish for more than one country" then use the ADD 1lock - with the same format..

%ection 7 (.t,er Assets and @ia&ilities#


2loc9 0( .t,er Investment (i)e), position <it, unrelated parties#
This is a residual cate2ory that includes all financial outstandin2 lia3ility and claims not considered as direct in*estment or ortfolio in*estment. .utstandin+ @ia&ilities <it, unrelated party .t,er Investment Previous Marc, 0)1 Drade Credit 0) @oans 0) 1 Currency $ Deposits 0) " .t,er receiva&le and paya&le accounts .utstandin+ claims on unrelated party

Amount in 6s la9, as at t,e end of @atest Marc, Previous Marc, @atest Marc,

Te.Form *ersion of this 8eturn is a*aila3le on the F67A Forms section under the GFormsA cate2ory on the 81I we3site %www.r3i.or2.in'. (ystem 8e@uirement/ 7(.6Ccel 2##5 and a3o*e" with macro ena3ledU Declaration The forei2n in*estment recei*ed and re orted ha*e 3een utiliKed in com liance with the ro*ision of a Pre*ention of 7oney ?aunderin2 Act 2##2%P7?A' and Jnlawful Acti*ities%Pre*ention' Act" 1=:! %JAPA'. ;e confirm that the in*estment com lies with the ro*isions of all a lica3le 8ules and 8e2ulations

Place/ Date/

(i2nature and ,ame of the AuthoriKed erson (eal+(tam of the Com any

Anne* I 5
Form FC-*R) Declaration re"ar'in" trans er o s!ares $ com+ulsoril( an' man'atoril( con#erti%le +re erence s!ares (C>CP)) $ 'e%entures $ot!ers %( ,a( o sale rom resi'ent to non resi'ent $ non-resi'ent to resi'ent (to be submitte to the esignate AD branch in 8ua rup&icate #ithin 7< ays from the ate of receipt of fun s) *!e ollo,in" 'ocuments are enclose' *or sale of shares " compulsorily and mandatorily con#ertible preference shares " debentures " others by a person resident in India i. ii. iii. iv. v. Consent 0etter u&y signe by the se&&er an buyer or their u&y appointe agent an in the &atter case the Po#er of Attorney Document. The shareho& ing pattern of the investee company after the ac8uisition of shares by a person resi ent outsi e In ia. Certificate in icating fair va&ue of shares from a Chartere Accountant. Copy of -ro*erAs note if sa&e is ma e on %toc* +xchange. Dec&aration from the buyer to the effect that he is e&igib&e to ac8uire shares , compu&sori&y an man atori&y convertib&e preference shares , ebentures,others un er 'DI po&icy an the existing sectora& &imits an Pricing .ui e&ines have been comp&ie #ith. Dec&aration from the 'II,sub account to the effect that the in ivi ua& 'II , %ub account cei&ing as prescribe has not been breache . Additional documents in respect of sale of shares " compulsorily and mandatorily con#ertible preference shares " debentures " others by a person resident outside India vii. viii. 1 If the se&&ers are N!Is,"C-s$ the copies of !-I approva&s$ if app&icab&e$ evi encing the shares he& by them on repatriation,non(repatriation basis. No "b1ection,Tax C&earance Certificate from Income Tax Authority, Chartere Account.

vi.

Name o t!e com+an(

ress (inc&u ing e(mai& $

te&ephone Number$ 'ax no)

Activity

1#>

NIC Co e No. / 8!et!er FDI is allo,e' un'er Automatic route %ectora& Cap un er 'DI Po&icy Nature o transaction (/trike out whiche#er is not applicable( 0 Name o t!e %u(er Constitution $ Nature o t!e in#estin" 4ntit( %pecify #hether In ivi ua& Company 'II J '5CI 'oreign Trust Private +8uity 'un Pension, Provi ent 'un %overeign )ea&th 'un (%)' ) ;. Partnership , Proprietorship firm 1<. 'inancia& Institution 11. N!Is , PI"s Date an P&ace of Incorporation A ress of the buyer (including e4mail$ telephone number& *a6 no&( Name o t!e seller Constitution $ Nature o t!e 'isin#estin" entit( %pecify #hether 1. /. In ivi ua& Company 1. /. 2. 4. 6. 7. 9. :.

&

Transfer from resi ent to non resi ent , Transfer from non resi ent to resi ent

The initial in*estment+s was+were made 3y FHCI under FDI (cheme in terms of (chedule 1 to ,otification ,o. F67A.2#+2###.81 dated 7ay 5" 2###

(;F mean a )o*ernment in*estment *ehicle which is funded 3y forei2n eCchan2e assets" and which mana2es those assets se arately from the official reser*es of monetary authorities.

1#=

2. 'II ## 4. '5CI 6. 'oreign Trust 7. Private +8uity 'un 9. Pension, Provi ent 'un :. %overeign )ea&th 'un (%)' ) ;. Partnership, Proprietorship firm 1<. 'inancia& Institution Date 11. an N!Is,PI"s P&ace of Incorporation

A ress of the se&&er (including e4 mail$ telephone %umber *a6 no(

Particulars o earlier Reser#e Bank $ FIPB a++ro#als Details re"ar'in" s!ares $ com+ulsoril( an' man'atoril( con#erti%le +re erence s!ares (C>CP)) $ 'e%entures$ ot!ers (suc! as FDI com+liant instruments like +artici+atin" interest ri"!ts in oil iel'sA etc.) to %e trans erre' Date of the transaction Number of Face Negotiated Amount of shares value Price for consideratio CMCPS / in the n in Rs. debenture Rs. transfer**in s Rs. /others

Forei"n In#estments in t!e com+an(

No. of shares
-efore the transfer

Percentage

After the transfer 9.


8!ere t!e s!ares $ C>CP) $ 'e%entures $ ot!ers are liste' on )tock 4xc!an"e

##

The initial in*estment+s was+were made 3y FHCI under FDI (cheme in terms of (chedule 1 to ,otification ,o. F67A.2#+2###.81 dated 7ay 5" 2###.

(;F mean a )o*ernment in*estment *ehicle which is funded 3y forei2n eCchan2e assets" and which mana2es those assets se arately from the official reser*es of monetary authorities.

11#

Name of the %toc* +xchange


+rice 7uoted on the /tock e6change 8!ere t!e s!ares $ C>CP) $ 'e%entures $ ot!ers are =nliste'

Price as per 5a&uation gui e&ines@


Price as per Chartere Accountants @ , @@ 5a&uation report (CA Certificate to be attache ) %( Declaration t!e trans eror trans eree I $ 8e !ere%( 'eclare t!at

i.

The particu&ars given above are true an correct to the best of my,our *no#&e ge an be&ief. ii. I, )e$ #as,#ere ho& ing the shares compu&sori&y an man atori&y convertib&e preference shares , ebentures, other as per 'DI Po&icy un er '+!A, '+CA !egu&ations on repatriation,non repatriation basis. iii. I, )e$ am,are e&igib&e to ac8uire the shares compu&sori&y an man atori&y convertib&e preference shares , ebentures ,other of the company in terms of the 'DI Po&icy. It is not a transfer re&ating to shares compu&sori&y an man atori&y convertib&e preference shares , ebentures ,others of a company engage in financia& services sector or a sector #here genera& permission is not avai&ab&e. iv. The %ectora& &imit un er the 'DI Po&icy an the pricing gui e&ines have been a here to. )i"nature o t!e Declarant or !is 'ul( aut!orise' a"ent Date? Note? In respect of the transfer of shares " compulsorily and mandatorily con#ertible preference shares " compulsorily and mandatorily con#ertible debentures" others from resident to non resident the declaration has to be signed by the non resident buyer$ and in respect of the transfer of shares " compulsorily and mandatorily con#ertible preference shares " compulsorily and mandatorily con#ertible debentures" other from non4resident to resident the declaration has to be signed by the non4resident seller&

111

Certi icate %( t!e AD Branc! It is certifie that the app&ication is comp&ete in a&& respects. The receipt , payment for the transaction are in accor ance #ith '+CA !egu&ations , !eserve -an* gui e&ines.

)i"nature Name an Designation of the "fficer Date > Name of the AD -ranch AD -ranch Co e

112

@no, ;our Customer (@;C) Form in res+ect o t!e non-resi'ent in#estor !egistere Name of the !emitter , Investor (Name$ if the investor is an In ivi ua&) !egistration Number (Fni8ue I entification Number@ in case remitter is an In ivi ua&) !egistere A ress (Permanent A if remitter In ivi ua&) Name of the !emitterKs -an* !emitterKs -an* Account No. Perio of ban*ing !emitter re&ationship #ith the ress

@Passport No.$ %ocia& %ecurity No$ or any Fni8ue No. certifying the bonafi es of the remitter as preva&ent in the remitterKs country. e confirm that all the information furnished above is true and accurate as !rovided b" the overseas remitting ban# of the non$resident investor. (%ignature of the Authorise "fficia& of the AD ban* receiving the remittance) Date> P&ace> %tamp >

115

Pro orma )tatement o in lo,s$out lo,s on account o remittance recei#e'$ma'e in connection ,it! trans er o s!ares $ com+ulsoril( an' man'atoril( con#erti%le +re erence s!ares $ 'e%entures$ot!ers$ot!erA %( ,a( o sale Cate"or(-,ise Part A - NRI$erst,!ile :CB Part B - Forei"n National$non-resi'ent incor+orate' entit( Part C - Forei"n Institutional In#estors In lo, -*rans er rom resi'ent to non-resi'ent 3Amount in Rs.= Date Name Activity NIC Co e of of the Trans Comp action any Name Consti Name of the tution, of the -uyer Natur %e&&er e of -usin ess of the -uyer (6) (7) (9) Consti No. of 'ace tution, %hare 5a&ue Natur s e of transf -usin erre ess of the %e&&er (:) (;) (1<) %a&e Tota& price Inf&o# per share

(1)

(/)

(2)

(4)

(11)

(1/)

3Amount in Rs.= Date Name Activity NIC Name Consti Name Consti No. of 'ace %a&e Co e of the tution, of the tution, %hare 5a&ue price of of the %e&&er Natur -uyer Natur Trans Comp per s action any share e of e of transf -usin -usin erre ess of ess of the the %e&&er -uyer (1) (/) (2) (4) (6) (7) (9) (:) (;) (1<) (11)

:ut lo, - *rans er rom non-resi'ent to resi'ent

Tota& Inf&o#

(1/)

11$

Anne* I3
Form DR 3!efer to paragraph 4(/) of %che u&e I= Return to %e ile' %( an In'ian com+an( ,!o !as arran"e' issue o GDR$ADR Instructions? The 'orm shou& be comp&ete an submitte to the !eserve -an* of In ia$ 'oreign Investment Division$ Centra& "ffice$ Cumbai. 1. /. 2. 4. Name of the Company A A ress of !egistere "ffice ress for correspon ence > > > >

+xisting -usiness (P&ease give the NIC Co e of the activity in #hich the company is pre ominant&y engage ) Detai&s of the purposes for #hich .D!s,AD!s have been raise . If fun s are ep&oye for overseas investment$ etai&s thereof. Name an a abroa ress of the Depository

6.

>

7. 9.

> >

Name an A ress of the 0ea ,Canager Investment,Cerchant -an*er Name an a resses of the %ub( Canagers to the issue Name an a custo ians ress of the In ian

:. ;. 1<.

> > >

Detai&s of 'IP- approva& (P&ease 8uote the re&evant NIC Co e if the .D!s are being issue un er the Automatic !oute)

11.

> )hether any overa&& sectora& cap for foreign investment is app&icab&e. If yes$ p&ease give etai&s. Detai&s of the +8uity Capita& (a) Authorise Capita& (b) Issue an Pai (up Capita& (i) Le& by persons !esi ent in In ia (ii) Le& by foreign Investors other than 'IIs,N!Is,PI"s,"C-s (A > -efore Issue After Issue

1/.

&ist of foreign investors ho& ing more than 1< per cent of the pai (up capita& an number of shares he& by each of them shou& be furnishe ) (iii) Le& by N!Is,PI"s,"C-s (iv) Le& by 'IIs. Tota& +8uity he& by non H resi ents (c) Percentage of e8uity he& by non( resi ents to tota& pai (up capita& 12. )hether issue #as on private p&acement basis. If yes$ p&ease give etai&s of the investors an AD!s,.D!s issue to each of them. Number of .D!s,AD!s issue !atio of .D!s,AD!s to un er&ying shares Issue !e&ate +xpenses > (a) 'ee pai ,payab&e to Cerchant -an*ers,0ea Canager (i) Amount (in F% M etc.) (ii) Amount as percentage to the tota& issue. (b) "ther +xpenses 19. 1:. )hether fun s are *ept abroa . If yes$ name an a ress of the ban*. Detai&s of the &isting arrangement > Name of %toc* +xchange Date of commencement of tra ing o#n by .overnment of In ia an !eserve -an* of In ia have > >

14. 16. 17.

> >

Certifie that a&& the con itions &ai been comp&ie #ith. % ,( Chartere Accountant

% ,( Authorise %ignatory of the Company

Form DR - Cuarterl(
3!efer to paragraph 4(2) of %che u&e 1=

Anne* I1!

Cuarterl( Return
(to be submitte to the !eserve -an* of In ia$ 'oreign Investment Division$ Centra& "ffice$ Cumbai) 1. /. 2. 4. 6. 7. Name of the Company A ress .D!,AD! issue &aunche on Tota& No. of .D!s,AD!s issue Tota& amount raise Tota& interest earne ti&& en of 8uarter Issue expenses an commission etc. Amount repatriate -a&ance *ept abroa ( Detai&s (i) (ii) (iii) 1<. 11. 1/. -an*s Deposits Treasury -i&&s "thers (p&ease specify)

9.

&
;.

No. of .D!s,AD!s sti&& outstan ing CompanyAs share price at the en of the 8uarter .D!s,AD!s price 8uote on overseas stoc* exchange as at the en of the 8uarter

Certifie that the fun s raise through .D!s,AD!s have not been investe in stoc* mar*et or rea& estate.

/d"4 Chartere Accountant

/d"4 Authorise %ignatory of the Company

Anne* - 11
Certi icate to %e Furnis!e' %( t!e Pros+ecti#e In#estor as ,ell as t!e Pros+ecti#e Reci+ient 4ntit( (Para 0) )15)1 (ii## It is certifie that the fo&&o#ing is the comp&ete &ist of a&& inter(se agreements$ inc&u ing the shareho& ers agreement$ entere into bet#een foreign investor(s) an investee bro#nfie& pharmaceutica& entity 1. NNNNNN /. NNNNNN. 2. NNNNNN.
(copies of a&& agreements to be enc&ose ) It is a&so certifie that none of the inter(se agreements$ inc&u ing the shareho& ers agreement$ entere into bet#een foreign investor(s) an investee bro#nfie& pharmaceutica& entity contain any non(compete c&ause in any form #hatsoever. It is further certifie that there are no other contracts,agreements bet#een the foreign investor(s) an investee bro#nfie& pharma entity other than those &iste above. The foreign investor(s) an investee bro#nfie& pharma entity un erta*e to submit to the 'IP- any inter(se agreements that may be entere into bet#een them subse8uent to the submission an consi eration of this app&ication.