Overseas direct investment rules permit resident entities to invest abroad under automatic or approval routes with compliance and reporting. Resident Indian parties may make overseas direct investments in JVs and WOS either under the Automatic Route or with prior Reserve Bank Approval; the framework prescribes the components to be reckoned as financial commitment, eligible funding sources, sectoral and activity-based prohibitions, valuation and reporting requirements, special conditions for financial sector investments, rules for guarantees and pledges, processes for transfers and write-offs, hedging permissions, and operational reporting through a designated authorised dealer branch with allotment and use of a Unique Identification Number.