Prior approval for foreign offices in India required; project offices allowed with Indian contract, NGOs need government-route clearance.
Foreign persons must obtain prior regulatory approval to establish Liaison, Branch or Project Offices in India; project offices may be opened under general permission only where a contract with an Indian company exists and prescribed conditions are met. Foreign NGOs, non-profit entities and foreign government bodies are governed by the Government Route and must apply to the Reserve Bank for prior permission. Authorised Dealer Category I banks are to notify their constituents, and these directions operate alongside any other statutory approvals that may be necessary.

Cost reduction structures allowed to hedge exchange rate risk for trade, external commercial borrowings and specified domestic loans.
Permits use of cost reduction structures in OTC foreign exchange derivatives to hedge exchange rate risk for trade transactions, External Commercial Borrowings, and extends that permission to foreign currency loans availed domestically against FCNR(B) deposits, with regulatory amendments to the FEMA derivative regulations to be notified separately.

Overseas direct investment reporting requirement: annual APR submission by Indian parties based on audited accounts to authorised dealers.
Indian parties that have established or acquired overseas JVs or WOSs must submit an Annual Performance Report (APR) in Form ODI Part III to their designated Authorised Dealer annually, prepared on the basis of the latest audited annual accounts of the JV/WOS unless the Reserve Bank exempts them; the prior conditional exemption permitting APRs based on un audited accounts continues, and AD Category I banks should notify constituents.

Extended trade credit permitted for infrastructure importers up to five years, subject to contracting and documentation conditions.
AD Category I banks may approve trade credit for import of capital goods with extended maturities for infrastructure sector borrowers up to five years if the credit is contracted ab initio for at least fifteen months and is not a short term rollover; AD banks may not issue Letters of Credit/guarantees/LoU/LoC for the extended period beyond three years. The circular sets all in cost ceilings linked to the relevant benchmark for different maturity bands and affirms unchanged applicability of other trade credit rules.

Bridge finance refinancing under automatic route permitted for infrastructure imports, subject to verification and ECB compliance requirements.
Refinancing of bridge finance in the form of buyers' or suppliers' credit for infrastructure imports is permitted under the automatic route if the trade credit is refinanced before the permissible trade credit period, the authorised dealer verifies import of capital goods via the Bill of Entry, the original trade credit and imports comply with trade credit and DGFT policies, and the proposed ECB complies with all extant ECB guidelines.

External commercial borrowings eligibility expanded, increasing permissible share of export earnings and imposing a per-entity and group cap.
The circular revises ECB eligibility and limits for repayment of rupee loans and fresh rupee capital expenditure by increasing the permissible ECB for an individual company to seventy-five per cent of average foreign exchange earnings over the immediate past three years or fifty per cent of the highest such earnings in any of those years, allows SPVs with at least one year of existence to avail up to fifty per cent of past year export earnings, and imposes a maximum per-company and group cap; other scheme conditions remain unchanged.

Overseas direct investment approvals: Indian parties' investments in Pakistan now subject to regulated approval route under FEMA.
Overseas direct investment by Indian parties in Pakistan will be considered under the approval route of Regulation 9 of the Foreign Exchange Management (Transfer or Issue of Any Foreign Security) Regulations, 2004, replacing the prior prohibition in Regulation 6(2); amendments to the Regulations will be issued and Authorised Dealer (Category I) banks are to inform their constituents. The direction is issued under Sections 10(4) and 11(1) of the Foreign Exchange Management Act and is without prejudice to other legal permissions.

Line of credit conditions require majority India sourcing, set LC/disbursement timelines, and mandate GR/SDF shipment declarations.
A Line of Credit to Mongolia finances eligible machinery, equipment, goods and consultancy services for a joint project, requiring at least 65 percent of goods and non consultancy services to be sourced from India and permitting up to 35 percent procurement from outside India; the agreement sets separate timelines for opening Letters of Credit and disbursement for project exports and supply contracts, mandates GR/SDF shipment declarations, disallows agency commission under the LOC while permitting exporter funded commission remittances subject to realization and prevailing rules, and directs AD Category I banks to notify exporters under FEMA authorities.

Line of credit conditions require majority Indian-sourced supplies, GR/SDF shipment declarations, and bank compliance under FEMA.
A Line of Credit from Exim Bank to the Central African Republic finances eligible Indian goods, services and consultancy for hydro-electric projects, requiring at least 75 percent Indian-supplied value and allowing up to 25 percent foreign procurement (excluding consultancy). The Credit Agreement is effective from August 22, 2012, with LC and disbursement timelines of 48 months from project completion for project exports and 72 months from execution for supply contracts. Shipments must be declared on GR/SDF forms, no agency commission is payable under the LOC, and AD Category-I banks must notify exporters and permit commission remittance only from exporter resources or EEFC balances subject to prevailing rules; directions are issued under FEMA.

Line of Credit conditions govern export eligibility, local content requirements and foreign exchange reporting for project supplies.
The Export-Import Bank of India's Line of Credit finances Indian exports of goods, services, equipment and consultancy for a designated project, requiring a substantial majority of contract value to be sourced from India while permitting limited non-consultancy procurement abroad. The Agreement prescribes deadlines for opening Letters of Credit and disbursements, mandates shipment declaration on GR/SDF forms, disallows agency commission under the LOC (subject to exporters' own remittance options), and directs AD Category I banks to inform exporters; the circular is issued under FEMA authority.

Currency risk hedging by QFIs permitted using forwards, options and swaps to cover rupee investment exposures.
Qualified Foreign Investors may hedge currency risk on permissible rupee denominated equity and debt investments using forwards, foreign currency INR options, and currency INR swaps (for IPO ASBA flows) through their AD Category I bank where the rupee account is maintained; hedge costs must be met from repatriable funds or normal inward remittances, outward remittances are net of taxes, eligibility is based on QFI declaration with quarterly AD bank review backed by QDP certification, forwards once cancelled cannot be rebooked though rollovers before maturity are permitted, and IPO swaps are limited to amounts linked to the proposed investment and to short tenors with no rebooking or rollovers.

Non-resident guarantees allowed for non-fund based rupee facilities between resident entities with mandated reporting requirements.
The Reserve Bank extends general permission for non-resident guarantees to support non-fund based rupee facilities between two residents, noting no foreign exchange event occurs until invocation; discharge and repayment shall follow existing FEMA notification procedures. Authorized Dealer Category I banks must submit consolidated quarterly reports of such guarantees issued and invoked, in the prescribed annex and Excel format, to the RBI ECB Division by the 10th of the following month. The policy is effective from the circular date and subject to future review.

Limited two way fungibility of Indian Depository Receipts allowed subject to conversion rules, reissuance limits, and regulatory oversight.
Limited two way fungibility for Indian Depository Receipts is permitted subject to conversion governed by prior guidelines' conditions, fresh issuance under existing provisions, re issuance only to the extent of redeemed/converted and sold IDRs, and an overall capital raising cap monitored by SEBI; issuance, redemption and fungibility are subject to SEBI (Issue of Capital and Disclosure Requirements) Regulations and other applicable government, SEBI and RBI guidelines.

Anti Money Laundering standards require MTSS Indian agents to apply international risk guidance and ensure sub agent compliance for remittances.
AML/CFT standards apply to cross border inward remittances under MTSS, requiring Authorised Persons (Indian agents) to consider international risk guidance, ensure client due diligence, maintain records and verify identity, and to make sub agents comply; legitimate transactions remain permissible and implementation is required under applicable foreign exchange and anti money laundering statutory frameworks.

AML/CFT standards require money changers to consider international risk statements and apply enhanced due diligence to jurisdictions.
Authorised money changing persons must consider an international risk statement and adapt customer acceptance, transaction screening, and record maintenance practices accordingly; the guidance does not bar legitimate transactions. The obligation extends to agents and franchisees, with franchisers accountable for their compliance, and requires internal dissemination and Principal Officer acknowledgement, pursuant to statutory foreign exchange and anti money laundering directions.

Foreign direct investment by Pakistani nationals permitted with prior FIPB approval, subject to sectoral exclusions and Schedule I conditions.
A Reserve Bank circular permits persons resident outside India who are citizens of Pakistan or entities incorporated in Pakistan to purchase shares and convertible debentures under the Foreign Direct Investment framework with prior approval of the Foreign Investment Promotion Board, subject to Schedule I conditions; investments are barred if the Indian recipient is or will be engaged in defence, space, atomic energy or other sectors prohibited for foreign investment, and banks must inform customers of these conditions.

Annual Performance Report compliance required for overseas investments-declaration by investor and auditors' certification now mandated.
Form ODI Part I is amended to require the Indian party to declare and the statutory auditors to certify that, where applicable, the Annual Performance Report for all existing JV/WOS abroad has been submitted, as a condition for undertaking overseas direct investment under the Automatic Route; this complements existing auditor certifications on investment eligibility, funding limits, valuation norms, ECB/FCCB applicability and regulatory approvals for financial services investments.

Line of Credit enables export financing subject to substantial India sourced supply and prescribed disbursement and reporting rules.
Exim Bank's Line of Credit to Chad finances eligible goods, services, machinery, equipment and consultancy from India under India's Foreign Trade Policy. Contracts must source a substantial portion of supplies from India while allowing limited external procurement for non consultancy goods. The Credit Agreement is effective from July 26, 2012 with specified deadlines for opening Letters of Credit and disbursements for project and supply contracts. Shipments must be declared on GR/SDF forms. No agency commission is payable under the LOC; exporters may use own funds or EEFC balances for commission subject to realisation and AD Category I bank procedures. Directions issued under FEMA sections 10(4) and 11(1).

Foreign investment from Pakistan permitted under government route, excluding defence, space and atomic energy sectors.
The policy amendment permits investment by a citizen of Pakistan or an entity incorporated in Pakistan, only under the Government route, in sectors/activities other than defence, space and atomic energy, revising paragraph 3.1.1 of the Consolidated FDI Policy and taking immediate effect.

Downstream investment treatment: banking-company restructuring and trading-book investments excluded from indirect foreign investment, but strategic subsidiary investments included.
Downstream investments by an Indian banking company owned or controlled by non-residents made under Corporate Debt Restructuring, other loan restructuring mechanisms, held in trading books, or arising from acquisition of shares due to loan defaults shall not count as indirect foreign investment; however, strategic downstream investments-investments by these banks in their subsidiaries, joint ventures and associates-shall count towards indirect foreign investment.