Overseas direct investment permits equity-based foreign business expansion subject to financial services eligibility and financial commitment limits.

Overseas direct investment by an Indian entity may be made through equity capital for bona fide business activities by subscription, acquisition, rights or bonus issues, capitalisation of eligible dues, securities swaps, or schemes of arrangement. Investment in foreign financial-services entities is subject to profitability, regulatory registration and approval conditions, with limited exceptions for non-financial-services entities. Total financial commitment across foreign entities is capped at 400 percent of net worth, subject to specified inclusions and exclusions, while designated public sector undertakings investing in strategic sectors are exempt from the limit.

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