Line of credit facility enables full f.o.b. financing for eligible exports to Vietnam subject to specified approvals and procedures.
A government-to-government line of credit of six hundred million rupees to Vietnam permits imports of specified capital goods, consumer durables and consultancy services from India. Each export contract requires approval by both Governments and the Ministry of Finance; Letters of Credit must be opened by the Bank of Foreign Trade of Vietnam, advised to the State Bank of India, and finance the full f.o.b. value with a prescribed reimbursement clause. Contracts, L/Cs and drawdowns must meet specified deadlines, shipments must be declared on GR/SDF/SOFTEX forms with required superscription and certification, import content must be low, and agency commissions are disallowed. Directions are issued under FEMA.

State credit repayment: nominated Indian banks authorised to handle exports to Russia under FEMA directions, with penalties for non-compliance.
The Reserve Bank of India has added Oriental Bank of Commerce, State Bank of Patiala and Bank of Punjab Ltd. to the list of nominated banks authorised to handle exports to Russia against repayment of State Credits; authorised dealers must notify constituents and comply with directions issued under the Foreign Exchange Management Act, non-observance attracting statutory penalties.

FDI liberalisation expands sectoral access, removing caps, easing dividend controls and permitting full foreign ownership in key sectors.
Government liberalises FDI by permitting full foreign ownership in e commerce (restricted to B2B and requiring divestment to Indian public if listed abroad), removing dividend balancing for specified consumer goods industries with immediate effect, eliminating the upper foreign equity limit for non atomic power projects under automatic approval, and allowing full foreign ownership in oil refining under the automatic route.

Direct investment rules: procedures and compliance for Indian investment in overseas joint ventures and wholly owned subsidiaries.
Indian parties may invest directly in overseas joint ventures or wholly owned subsidiaries under the 2000 Regulations subject to compliance with procedural filings (form ODA, form A-2, form ODR), routing transactions through one designated authorised dealer branch, allotment and use of a Reserve Bank unique identification number, limits on capitalisation of dues combined with market purchases to 25% of net worth, and reporting and approval requirements for certain investments; authorised dealers must obtain prescribed documents and report remittances promptly.

Special currency basket value updated; authorised dealers must adopt the new rupee conversion and notify constituents accordingly.
The Reserve Bank of India directed authorised dealers to adopt a revised rupee valuation for the special currency basket used in settlement of Deferred Payments Protocols with the erstwhile USSR, effective from the stated operative date; authorised dealers must notify constituents and comply with the instruction issued under Sections 10(4) and 11(1) of the Foreign Exchange Management Act, 1999, failure of which attracts statutory penalties.

Foreign exchange limits updated: travel ceilings set and documentation and reporting duties clarified for money changers.
Revises authorised money changers' foreign exchange limits for private and business travel, replacing prior scales, and requires authorised persons to obtain declarations and information sufficient to satisfy them that transactions are not intended to contravene the Act. Reserve Bank will not prescribe specific documents; money changers must retain records, refuse transactions where applicants fail to comply satisfactorily, and report suspected contraventions. FFMCs continue to be governed by existing rules and are subject to statutory penalties for non observance.

Foreign investment in non-banking finance allowed via wholly foreign-owned downstream subsidiaries subject to mandated public divestment.
Holding companies meeting the prescribed minimum capitalisation may form wholly foreign-owned downstream subsidiaries to conduct specified NBFC activities; those subsidiaries must divest at least 25% of equity through a public offering within the prescribed timeframe. Press Note No. 4 (1997 Series) is amended to this extent, and other NBFC guidelines issued in earlier Press Notes continue to apply.

Export obligation exempts EOU/EPZ units from industrial licence requirements while maintaining stricter export commitments.
EOU/EPZ units manufacturing SSI-reserved items are exempted from obtaining an industrial licence even where foreign equity exceeds the stated threshold because their existing EOU/EPZ export obligation is higher; prior government approval for foreign investment is not required unless other conditions apply, and upon debonding non-SSI units must undertake to export a mandated portion of SSI-reserved items they produce.

SSI status protection preserves prior investment ceiling for provisionally registered units with project steps begun before the new limit.
Units provisionally registered under the 10 December 1997 notification that had undertaken concrete project implementation steps before 24 December 1999 retain SSI status under the earlier investment threshold despite the revised lower limit, provided investment in plant and machinery does not exceed the prior ceiling.

Reduction in investment limit on SSI units preserves earlier permanent, switched and timely provisional registrations as SSI status.
The policy reduces the investment limit for small-scale and ancillary undertakings, and clarifies that units with permanent registration under the December 1997 order, units that switched over to SSI status under that order, and units with provisional State registration obtained within the 180 day limitation period specified in the December 1997 order, shall continue to remain classified as SSI units despite the subsequent reduction in the investment threshold.

Automatic route for FDI expanded, subject to specified exclusions, sectoral caps and RBI monitoring.
All activities are placed under the automatic route for FDI/NRI/OCB investment except proposals requiring an Industrial Licence, proposals where the foreign collaborator has an existing tie up in India, acquisitions of shares in existing Indian companies by foreign/NRI/OCB investors, and proposals outside notified sectoral policy/caps or in prohibited sectors; automatic approvals remain subject to notified sectoral policy and equity caps, RBI monitoring and NIC 1987 classification, with sector specific ceilings and conditions set and certain sectors requiring FIPB approval or remaining closed to such investment.

State credit repayment in US dollars requires structured advance payments and multi-year instalment repayments under amended protocols.
Repayment of Russian State credit in US dollars requires staged advance payments and the balance plus interest to be paid in equal annual instalments over seven years beginning the year after utilisation. Advance payments must be credited to the Russian bank's US dollar escrow account; balance repayments and interest credited to a central non repatriable US dollar account of the Bank for Foreign Economic Affairs maintained with the Reserve Bank, to be used for exports from India to Russia. Authorised dealers must remit repayments in freely convertible US dollars with Ministry authorisation and full credit arrangement details.

Export permission for cotton yarn extended with a quantitative ceiling and EOU export exemptions through the year-end.
Export of cotton yarn by EOUs/EPZ units is permitted subject to domestic cotton sourcing for counts 1-40, with previously granted flexibilities extended and an overall quantitative ceiling imposed for the calendar year; 100 percent EOUs may export without count or domestic cotton restrictions provided such exports remain within the overall ceiling, and all other provisions of the earlier Press Note continue to apply.