(a) A non-resident entity can invest in India, subject
to the FDI Policy except in those sectors/activities which are prohibited.
However, an entity of a country, which shares land border
with India or where
the beneficial owner of an investment
into India is situated in or is a citizen
of any such country, can invest only
under the Government route. Further, a citizen of Pakistan or an
entity incorporated in Pakistan can invest, only under the Government route, in
sectors/activities other than defence, space, atomic energy and
sectors/activities prohibited for foreign investment.
In the event of the transfer of ownership of any existing or future FDI in an
entity in India, directly or indirectly, resulting in the beneficial ownership
falling within the restriction/purview of the para 3.1.1(a), such subsequent
change in beneficial ownership will also require Government approval.
NRIs resident in Nepal and Bhutan as well as citizens
of Nepal and Bhutan are permitted to invest
in the capital of Indian
companies on repatriation basis, subject to the condition that the amount
of consideration for such investment shall be paid only
by way of inward remittance in free foreign
exchange through normal banking
OCBs have been derecognized as a class of investors in
India with effect from September 16, 2003.
Erstwhile OCBs which are incorporated outside India and are
not under the adverse notice of RBI can make fresh investments as incorporated
non-resident entities in accordance with the FDI Policy and Foreign Exchange
Management (Non-Debt Instrument) Rules, 2019.
A company, trust and partnership firm incorporated outside
India and owned and
controlled by NRIs can invest
in India with the special
dispensation as available to NRIs under the FDI Policy.
Foreign Portfolio Investors
(FPI) may make investments in the manner
and subject to the terms and
conditions specified in Schedule II of Foreign Exchange Management (Non-Debt
Instruments) Rules, 2019.
Registered FPIs and NRIs can invest/trade through a
registered broker in the capital of Indian Companies on recognised Indian Stock
Exchanges as per the applicable Schedule under the Foreign Exchange Management
(Non-Debt Instruments) Rules, 2019, as amended from time to time.
A Foreign Venture Capital Investor (FVCI) may make
investments in the manner and subject to the terms and conditions specified in
Schedule VII of Foreign Exchange Management (Non-Debt Instruments) Rules, 2019.
An NRI or an OCI may subscribe to National Pension
System governed and administered by Pension
Fund Regulatory and Development Authority
(PFRDA), provided such subscriptions are made through normal banking
channels and the person is eligible to invest as per the provisions of the
PFRDA Act. The annuity/ accumulated saving will be repatriable.
ELIGIBLE INVESTEE ENTITIES
can issue capital against FDI.
A Non-Resident Indian (NRI) can invest in the capital of a firm
or a proprietary concern
in India on non-repatriation basis provided;
Amount is invested
by inward remittance or out of NRE/FCNR(B)/NRO
account maintained with Authorized Dealers/Authorized banks.
The firm or proprietary concern is not engaged in any agricultural/plantation
or real estate business or print media sector.
Amount invested shall not be eligible for repatriation
with repatriation option: NRIs may seek prior permission of Reserve
Bank for investment in sole proprietorship concerns/partnership firms with repatriation option. The application will be decided
in consultation with the Government of India.
(iii) Investment by non-residents other than NRIs: A person resident outside
India other than NRIs may make an application and seek prior approval of Reserve
Bank for making investment in the capital
of a firm or a proprietorship concern or any
association of persons in India. The application will be decided in
consultation with the Government of India.
An NRI is not allowed to invest in a firm or proprietorship concern engaged
in any agricultural/plantation activity or real estate
business or print media.