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<h1>Foreign investment in India follows automatic or government approval routes with varying sectoral caps and compliance requirements</h1> Foreign Exchange Management Act regulations establish permitted sectors, entry routes, and sectoral caps for foreign investment in Indian entities. Two primary entry routes exist: automatic route requiring no prior approval, and government route requiring government approval. Foreign portfolio investment up to 49% generally permitted without government approval unless it transfers control to non-residents. Sectoral caps vary by industry, with 100% foreign investment allowed in most unlisted sectors under automatic route. Specific sectors have detailed conditions including agriculture, mining, defense, telecommunications, retail trading, pharmaceuticals, and financial services. Investment companies and core investment companies require government approval. Compliance responsibility lies with recipient companies, with various sector-specific regulatory requirements and operational conditions applicable.