FII currency hedging access expanded: FIIs may approach any AD bank subject to valuation, declarations and special account settlement.
AD Category I banks may accept FIIs for hedging currency risk on the market value of their entire India investments if supported by a valuation certificate from the designated AD bank and a declaration that global outstanding hedges plus cancelled derivatives across AD banks are within the market value. FIIs must provide quarterly declarations to the custodian that total derivatives booked across AD banks are within the market value. Hedges with non-designated AD banks must be settled through the Special Non-Resident Rupee A/c maintained with the designated bank via RTGS/NEFT.

Loans against NRE/FCNR(B) deposits allowed without ceiling subject to margin; premature withdrawal of such deposits prohibited.
Banks may grant loans against NR(E)RA and FCNR(B) deposits to depositors or third parties without any ceiling, subject to usual margin requirements; 'loan' includes all fund based and non fund based facilities and FCNR(B) margins are notionally calculated in rupee terms. Premature withdrawal of such deposits is prohibited when loans are availed and must be disclosed at sanction. Existing non conforming loans may continue for their term but shall not be renewed; other conditions unchanged. Instructions are effective immediately and issued under the foreign exchange statute.

Electronic reporting compliance: test-mode FINnet uploads required; continue CD submission until go-live for Authorised Persons under PMLA.
Authorised Persons must begin submitting CTRs and STRs on the FINnet gateway in test mode to verify XML-compliant electronic uploads, while continuing to provide existing reports on CD until FIU-IND announces the go-live date; helpdesk support is available and earlier reporting instructions remain unchanged under directions issued pursuant to FEMA and PMLA.

Report submission in test mode: authorised entities must validate XML uploads on FINnet while maintaining existing report delivery.
Authorised Persons must begin submitting transaction reports on the FINnet Gateway in test mode to validate XML-compliant electronic upload capability, while continuing to submit existing reports on physical media until the authority announces the go-live; entities should use the helpdesk for assistance and ensure readiness to implement the new XML reporting format for Cash Transaction Reports and Suspicious Transaction Reports.

Foreign ownership thresholds in NBFCs allow high-foreign-owned firms to form step-down subsidiaries without additional capital, subject to capitalization.
NBFCs with high levels of foreign ownership and meeting the prescribed minimum capitalisation may establish step-down subsidiaries for specified NBFC activities without restriction on the number of operating subsidiaries and without bringing in additional capital; the minimum capitalisation mandate for downstream subsidiaries is therefore inapplicable to those entities.

All-in-cost ceiling for external commercial borrowings remains in force; AD Category I banks must notify constituents.
The circular maintains the existing all-in-cost ceiling for External Commercial Borrowings until further review; AD Category I banks must notify constituents, other ECB policy aspects remain unchanged, and the directions are issued under sections 10(4) and 11(1) of the Foreign Exchange Management Act, 1999, without prejudice to other legal permissions.

All-in-cost ceiling for trade credits remains applicable for import finance, requiring AD Category I banks to apply and notify customers.
Continuation of the all-in-cost ceiling for trade credits for imports into India remains applicable as specified in A.P. (DIR Series) Circular No. 28 dated September 11, 2012 until further review; Authorized Dealer Category I banks must apply this ceiling and notify their constituents, while all other trade credit policy aspects remain unchanged and directions are issued under sections 10(4) and 11(1) of the Foreign Exchange Management Act, 1999.

Special Currency Basket value revised for deferred payment protocols, requiring authorised dealers to implement updated Rupee valuation.
The Reserve Bank of India notified AD Category I banks of a revision to the Rupee valuation of the Special Currency Basket applicable to Deferred Payment Protocols with the erstwhile USSR, fixed effective from the specified date; banks must inform constituents and implement the revised valuation, and the Directions are issued under sections 10(4) and 11(1) of the Foreign Exchange Management Act, 1999, without prejudice to other statutory permissions.

Foreign investment threshold change allows majority foreign owned NBFCs to form step down subsidiaries without bringing additional capital.
The amendment permits NBFCs with foreign investment above three quarters and up to full ownership and with a minimum capitalisation to set up step down subsidiaries for specified NBFC activities without restriction on the number of operating subsidiaries and without bringing in additional capital; the minimum capitalization requirement in the circular therefore does not apply to downstream subsidiaries.

Special Currency Basket valuation revised, requiring authorised dealer banks to adopt the new rupee conversion and notify constituents.
The circular notifies Authorised Dealer Category I banks of a revision to the rupee value of the Special Currency Basket, fixes the revised rupee value effective from a specified date, directs AD Category I banks to inform their constituents, and states the directions are issued under sections 10(4) and 11(1) of the Foreign Exchange Management Act, 1999 without prejudice to other legal permissions.

FDI allotment pricing: non resident subscriptions under Memorandum of Association may be accepted at face value if eligible.
The Reserve Bank clarified that when non residents, including NRIs, subscribe to an Indian company's Memorandum of Association in compliance with the Companies Act, such investment may be made at face value, provided the investor is eligible under the FDI scheme; AD Category I banks are to inform their constituents of this pricing clarification, subject to other statutory permissions or approvals.

Liaison and branch office reporting requirement: foreign offices must notify state police, file annual Annex reports and inform banks.
Foreign entities establishing Liaison, Branch or Project Offices in India must submit the prescribed Annex information to the state police authority within five working days of becoming functional, file the Annex annually along with the Annual Activity Certificate/Annual Report, and furnish copies to their Category I Authorised Dealer bank; existing offices must likewise file the Annex annually. The Annex specifies detailed information on the foreign entity, Indian office, head of office, personnel and visa compliance, visitors, projects/contracts, equipment imports and government and civil society contacts.

Trade credit limit for gold imports restricted to short-term usance from shipment under FEMA-authorised directions.
Suppliers' and Buyers' credit, including the usance period of Letters of Credit opened for import of gold in any form, including jewellery and items studded with diamonds or other precious/semi precious stones, shall not exceed ninety days from the date of shipment. Authorised Dealer Category I banks must apply this short term trade credit restriction, notify customers, and continue to follow existing circulars on related precious metal and diamond imports; the directions are issued under Section 10(4) and Section 11(1) of FEMA, 1999.

KYC AML obligations require specified non cash payment methods for authorised persons selling foreign exchange to customers.
The circular clarifies that for sale of foreign exchange within a person's eligibility, Authorised Persons may accept payment only by crossed cheque on the sponsoring firm's bank account, banker's cheque, pay order, demand draft, debit card, credit card or prepaid card where the rupee payment exceeds the specified threshold; for multiple drawals within the permitted period, second and subsequent payments must be by these specified non cash instruments when the cumulative rupee payment exceeds the threshold.

Foreign investment policy sets sectoral FDI limits and routes for retail, aviation, broadcasting and power exchanges.
The circular revises sectoral FDI entry and ownership ceilings: 100% FDI by a single non resident in Single Brand Product Retail Trading under the Government route; 51% in Multi Brand Retail Trading under the Government route; 49% foreign airline ownership in Indian aviation companies under the automatic/Government route; reviewed FDI parameters for Broadcasting Carriage Services under automatic/Government route; and 49% in Power Exchanges registered under CERC regulations under the Government route. AD Category I banks are to notify customers; Press Notes are enclosed and FEMA amendments will be notified separately.

Foreign investment in power exchanges limited under split FDI and FII caps, with FDI requiring government approval.
Foreign investment in Power Exchanges registered under the Central Electricity Regulatory Commission (Power Market) Regulations, 2010 is permitted up to 49% of paid-up capital, subject to a split between FDI and FII, with FDI requiring government approval, FII permitted under the automatic route and restricted to secondary market purchases; no non resident investor or persons acting in concert may hold more than the specified individual equity threshold, and all investment must comply with SEBI regulations, other applicable laws and security conditionalities.

Foreign investment limits in broadcasting: higher caps with phased automatic and government approval routes plus strict security conditions.
Policy raises foreign investment caps for specified broadcasting carriage services, distinguishing an automatic route for investment up to a lower threshold and a Government route for investment beyond that threshold up to the revised cap. The definition of foreign investment includes FDI and other foreign instruments (FIIs, NRIs, FCCBs, ADRs, GDRs, convertible preference shares). Companies with foreign investment must satisfy national security and personnel conditions-majority Indian directors, Indian residency for key executives, mandatory security clearances and prior Ministry permission for key appointments and board changes-and comply with monitoring, interception, data localization and inspection obligations set by the Ministry of Information & Broadcasting.

Foreign airlines equity participation limited to minority stake under government approval route, subject to SEBI, security and control conditions.
The policy permits foreign airlines to invest in Indian companies operating scheduled and non scheduled air transport services up to a minority equity ceiling under the government approval route; the ceiling subsumes FDI and FII, requires compliance with SEBI's ICDR and SAST regulations, and imposes security clearances for foreign nationals and clearances for any imported technical equipment. A Scheduled Operator's Permit remains conditioned on Indian registration, principal place of business in India, specified Indian majority on the board, and substantial ownership and effective control vested in Indian nationals; the policy excludes the designated national carrier.

FDI in multi brand retail: permitted under government route with conditions on minimum investment, local sourcing and backend infrastructure.
The Government permits FDI up to 51% in Multi Brand Retail Trading under the Government route, subject to conditions: a prescribed minimum foreign investment threshold; mandated investment of a specified portion of total FDI into defined back end infrastructure within a set period (excluding land costs and rentals); a local procurement obligation from Indian small industries based on installation time investment valuation; investor self certification with auditor certified accounts; outlet location restrictions tied to city population and master/zonal plans; government first right on agricultural procurement; prohibition of e commerce retailing by FDI owned multi brand retailers; and requirement of State consent and central processing before approval.

Single-brand retail FDI: exclusive non-resident licensee requirement and mandatory domestic sourcing, with e-commerce barred.
Amendment to the Single-Brand Product Retail Trading FDI policy permits 100% FDI with government approval but requires that only one non-resident entity, whether brand owner or licensee, undertake single-brand retailing for a specific brand through a legally tenable agreement; the Indian operating company must ensure compliance and submit the licensing agreement. FDI beyond a majority threshold requires domestic sourcing of thirty per cent of goods' value, preferably from MSMEs and related suppliers, self-certified and auditable, initially averaged over five years and thereafter annually. E-commerce retailing by FDI-backed single-brand companies is prohibited.