Deferred consideration for overseas direct investment is permitted where securities issue upfront and final pricing complies with applicable guidelines.

Deferred payment of consideration is permitted for acquisition of equity capital treated as overseas direct investment, if the agreement specifies a definite deferral period. Foreign securities equivalent to the total consideration must be transferred or issued upfront, and the final consideration must comply with applicable pricing guidelines. Deferred consideration for acquisition of equity capital of a foreign entity by a person resident in India is a non-fund based commitment. Seller indemnities may be agreed contractually, subject to compliance with foreign exchange law and applicable rules and regulations.

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