Downstream investment rules: indirect foreign investment must follow the same entry, conditionality and sectoral cap requirements as direct investment.
Downstream investment by Indian companies owned or controlled by non-resident entities is subject to the same entry route, conditionalities and sectoral caps as direct foreign investment; Press Note 2 (2009) provides the methodology for calculating total foreign investment at every stage. The policy distinguishes only operating companies, operating cum investing companies, and investing companies, prescribing sectoral compliance for recipients, mandatory prior Government approval for investing companies, notification requirements, board/shareholder approvals for equity induction, SEBI/RBI valuation rules, and inbound funding requirements for investing companies.

Line of Credit for export financing requires majority Indian-sourced supply and compliance with GR/SDF declarations.
Provision of an Exim Bank Line of Credit to finance eligible Indian exports and consultancy requires that a substantial portion of contract value be supplied from India, permits limited non-Indian procurement for non-consultancy goods, mandates shipment declarations on GR/SDF forms, imposes time-bound conditions for opening Letters of Credit and disbursement, and restricts agency commission payments from the credit while allowing exporter-funded commissions under prevailing remittance rules.

Special currency basket valuation revised; AD Category I banks must adopt the new rupee conversion rate under FEMA requirements.
The Reserve Bank notified a revision of the rupee valuation of the special currency basket applicable to Deferred Payment Protocols, directing Authorised Dealer Category I banks to adopt the revised rupee value for relevant settlements and to inform their constituents; the circular invokes Sections 10(4) and 11(1) of the Foreign Exchange Management Act, 1999 and states the directions are without prejudice to other statutory permissions.

Diamond Dollar Account liberalisation permits authorised banks to open dollar current accounts for eligible diamond exporters under conditions.
AD Category I banks are authorised to open and maintain Diamond Dollar Accounts in US dollars as non interest current accounts for exporters meeting Foreign Trade Policy eligibility; banks must verify track record and turnover, review eligibility annually, and close non compliant accounts. Account balances attract CRR and SLR; intra DDA transfers by the holder are prohibited; firms may hold only the prescribed number of DDAs. Permissible credits include US dollar finance and export realisations; permissible debits include payments for import/purchase of diamonds, gemstones and jewellery, repayment of USD loans and transfers to rupee accounts. Monthly reporting to the Reserve Bank is required.

Foreign investment caps: Government approval required when ownership or control of firms passes to non-resident entities.
Prior Government approval is required where non-resident entities acquire ownership or control of Indian companies in sectors with foreign investment caps. "Owned" means beneficial equity over 50% and "controlled" means power to appoint a majority of directors; definitions apply conversely to non-resident entities. The rule covers establishment of companies with foreign participation and transfers of ownership or control in existing companies via share transfers, mergers, amalgamations or acquisitions in capped sectors, excluding sectors permitting 100% automatic foreign investment.

Total foreign investment calculation clarified: counts direct and indirect foreign holdings and attributes downstream equity by ownership and control.
Guidelines prescribe a uniform methodology to compute total foreign investment in Indian companies by aggregating direct foreign investments by non-residents and indirect foreign investments transmitted through Indian investing companies. If an investing company is both owned and controlled by resident Indian citizens (or Indian companies ultimately so owned and controlled), its foreign investment is not attributed as indirect investment in the investee; otherwise the entire downstream investment is treated as indirect foreign investment, with a limited exception for wholly owned subsidiaries. The methodology applies at every investment stage and requires disclosure of ownership, control and inter-se agreements, while preserving sectoral rules.

Freight risk hedging permitted for domestic refiners and shipping firms subject to regulated exchanges and board-approved risk policies.
AD Category - I banks may permit domestic oil-refining and shipping companies to hedge freight risk in regulated overseas exchanges or OTC markets for a maximum forward tenor of one year. Oil refiners' hedges must be anchored to import/export contracts or limited anticipated imports based on past performance and regularized by underlying documents; shipping companies' hedges must concern owned/controlled ships without committed employment, with CA certification of quantum and regularization by employment documents. Banks must verify Board-approved Risk Management policies, obtain Board sanction, and ensure transactions reflect the underlying business; other companies must seek RBI permission via AD Category - I banks.

Line of Credit conditions require predominant Indian sourcing and specified disbursement timelines under foreign exchange directions.
Exim Bank's Line of Credit finances specified projects in the Central African Republic with a sourcing requirement that at least 85 per cent of contract value be supplied from India and up to 15 per cent (excluding consultancy) procured abroad; eligible exports must conform to India's Foreign Trade Policy. The agreement sets distinct deadlines for opening Letters of Credit and disbursements for project and supply contracts, requires GR/SDF declaration of shipments, disallows agency commission under the LOC while permitting exporter-funded commission payments subject to realisation and remittance rules, and directs Authorised Dealer Category I banks to notify exporters, under foreign exchange management provisions.

Line of Credit enabling exports to Senegal requires majority Indian content and FEMA compliance for export transactions.
A Line of Credit of USD 25 million from Exim Bank to Senegal finances eligible Indian goods and services (including consultancy) for rural electrification and fishing projects; at least 85 per cent of each contract's value must be supplied from India while up to 15 per cent (excluding consultancy) may be procured abroad. The Credit Agreement is effective January 2, 2009, with specified deadlines for Letters of Credit and disbursement tied to project completion and a 72-month period from execution for supply contracts. Shipments must be declared on GR/SDF forms. No agency commission is payable under the LOC, though exporters may remit commission from their own funds or EEFC balances subject to prevailing rules; AD Category - I banks must notify exporters. Directions issued under FEMA remain without prejudice to other legal permissions.

Foreign investment caps in print media set with government approval for facsimile newspaper editions and foreign magazine editions.
Policy permits foreign investment in facsimile editions of foreign newspapers with prior government approval and up to full ownership only when the investor is the owner of the original newspaper and the publisher is an Indian incorporated entity; such activity must comply with Ministry of Information & Broadcasting guidelines. Indian editions of foreign magazines dealing with news and current affairs may receive restricted foreign investment, including investment by NRIs/PIOs/FIIs, subject to prior government approval, the specified definition of "magazine," and the Ministry's guidelines for such publications.

Line of Credit conditions: majority India-sourced supplies required, timelines and FEMA compliance govern exports and disbursement.
A Line of Credit to the Government of Ghana finances eligible goods and consultancy services from India; exports must meet Foreign Trade Policy eligibility. At least majority India-sourced supplies (85% of contract price) are required, with up to 15% of non-consultancy goods/services procured outside India. The Credit Agreement is effective December 18, 2008 (execution September 2, 2008); LC opening and disbursement deadlines follow project completion schedules or specified maximum periods. Shipments must be declared on GR/SDF forms; no agency commission under the LOC though exporters may use own funds or EEFC balances for commission remittances after realisation, subject to AD Category I bank compliance and FEMA provisions.

External Commercial Borrowings policy liberalisation relaxes cost ceilings and widens eligible end uses for corporate ECB access.
External Commercial Borrowings policy temporarily dispenses with all-in-cost ceilings until June 30, 2009, allowing applicants exceeding prior ceilings to seek approvals; permits ECB for development of integrated townships under the Approval Route with minimum area or dwelling-unit thresholds; allows NBFCs exclusively financing infrastructure to on-lend ECBs from specified multilateral and government-owned development lenders subject to a 3:1 direct-lending-to-ECB-lending ratio and lender certification; and moves Hotels, Hospitals and Software corporates to the Automatic Route for eligible capital expenditure (excluding land), while other ECB terms and reporting remain unchanged.

Special currency basket valuation revised; banks must implement and notify constituents under foreign exchange directions.
The rupee value of the special currency basket under the Deferred Payment Protocols has been revised and fixed with effect from December 23, 2008 following a further revision on December 18, 2008; Authorised Dealer Category-I banks are directed to notify their constituents and implement the change. The directions are issued under Sections 10(4) and 11(1) of the Foreign Exchange Management Act, 1999 and are without prejudice to other statutory permissions or approvals.