Convertible notes rules govern foreign investment into startups, requiring sectoral approval and compliance with entry routes and pricing. Issuance and transfer of convertible notes by Indian startups to persons resident outside India are permitted subject to a prescribed minimum tranche, exclusion of certain foreign nationals and entities, and sectoral limitations requiring Government approval for issuance and conversion into equity, with compliance mandated for entry routes, sectoral caps, pricing guidelines; the Reserve Bank specifies payment and remittance conditions, and NRIs/OCIs may acquire notes on a non-repatriation basis.