Financial commitment limits for overseas direct investments restored; substantial annual commitments now require prior central bank approval.
Restoration of the pre-August 14, 2013 limit governs Financial Commitment (FC) by an Indian party for Overseas Direct Investments (ODI) under the automatic route, preserving the ceiling linked to 400% of the Indian party's net worth; however, any substantial annual financial commitment above the monetary threshold specified in the Circular requires prior Reserve Bank approval even if the aggregate FC is within the automatic-route limit.

Industrial license validity extended; extensions require land tenure, construction commencement, machinery orders and specified approvals.
Industrial license validity is extended to three years. Extension applications must be submitted to the Administrative Ministry sixty days before expiry (or with justification); any changes to company details or licensed capacity must be endorsed on the license. Where applicable, consult the Ministry of Home Affairs and the State Government, with MHA involvement limited to board/key personnel changes and mandatory for defence/explosive sectors. Applicants must show land ownership/lease for thirty years, commencement of construction (local body certificate), and orders for plant and machinery. Transfers, suspensions or cancellations during the period preclude extension. Renewals are for two years and licenses without production within five years lapse; extensions may be approved by the Joint Secretary without Licensing Committee referral.

Foreign contribution regulation: banks must verify registration, use designated accounts and report remittances under statutory rules.
The Foreign Contribution (Regulation) Act, 2010 requires persons with defined cultural, economic, educational, religious or social programmes to obtain a certificate of registration or prior permission before accepting foreign contribution; designated recipients must receive foreign contribution only into a single specified bank account, banks must verify registration/permission status and report prescribed remittance particulars to the specified authority in the prescribed form and manner, and transfers, utilisation and mixing of funds are restricted with enforcement powers for inspection, seizure and penalties.

Foreign Direct Investment rules govern entry routes, eligible instruments, pricing and reporting obligations for non resident investors.
Foreign investment in India is governed by FEMA and the Government's FDI policy, permitting investment via the Automatic or Government Route, subject to sectoral caps, eligibility rules, and a list of prohibited activities. Permissible instruments include equity and fully convertible securities, subject to SEBI pricing for listed issuers or fair-value certification for unlisted issuers. Payment modes include inward remittance, permitted foreign currency accounts, conversion of external liabilities and escrow arrangements. Detailed rules cover modes of investment, transfers, downstream investment attribution, reporting timelines and auditor certification, with AD Category I banks and RBI/FIPB sharing operational and approval responsibilities.

Export Realisation and Repatriation: exporters must repatriate full proceeds within prescribed period and banks must ensure compliance.
The circular mandates that exporters declare transactions on EDF/SOFTEX forms, realise and repatriate export proceeds within prescribed periods, and route receipts through AD Category I banks under specified modes (including NOSTRO/ACU/OPGSP arrangements). AD Category I banks must perform due diligence, KYC/AML checks, retain and report duplicate declaration forms, monitor outstanding export bills via XOS/ENC returns, permit certain facilities (EEFC/DDA/foreign currency accounts, third party payments, set off/netting) subject to conditions, and follow procedures for extensions, write offs and audit verification.

Import of Goods and Services rules clarify FEMA based RBI compliance for banks on remittances, documentation, and advance payment safeguards.
This Master Circular consolidates RBI directions under FEMA governing the Import of Goods and Services and details obligations of AD Category - I banks: ensure conformity with Foreign Trade Policy and KYC/AML norms, discontinue Form A 1, obtain and verify import licences and documentary evidence of import, and observe time limits for settlement. It prescribes conditions for advance remittances (including guarantees or standby LCs above specified thresholds), sectoral exceptions for rough diamonds, aircraft and BPO equipment, rules on interest for usance bills, replacement imports, third party payments, preservation and verification of import evidence, reporting via BEF/XBRL, and specific regimes for gold, precious metals, factoring and merchanting trade.

External Commercial Borrowings rules: automatic and approval routes define eligibility, permitted end uses, security and reporting requirements.
The Master Circular prescribes that ECBs, FCCBs, FCEBs and Trade Credits are governed under FEMA/RBI rules and may be raised via the Automatic Route (eligible corporates, NBFCs, MFIs, NGOs, SEZ units from recognised lenders subject to amount, maturity, all in cost and end use limits) or the Approval Route (for proposals outside automatic limits or by specified entities). It defines recognised lenders and eligible end uses (capital investment, infrastructure, specified services, overseas JV/WOS, IDC), prohibits certain end uses (capital market investment, real estate, general corporate purpose save exceptions), sets all in cost ceilings, security/guarantee rules, parking of proceeds, prepayment/refinance conditions, reporting (LRN, Form 83/ECB 2) and delegates procedural powers to AD Category I banks.

Overseas Direct Investment: automatic and approval routes govern resident investments abroad with prescribed limits and reporting.
Overseas direct investment in JVs and WOS abroad is governed by the 2004 Notification under FEMA, with two principal routes: the Automatic Route permitting investments subject to prescribed ceilings and conditions, and the Approval Route for other cases. Indian parties must file Form ODI via a designated AD Category I bank, obtain a Unique Identification Number, and comply with valuation, reporting, funding source and KYC requirements. Prohibitions apply to investments in real estate trading, banking and rupee linked financial products without prior approval, and regulated entities in the financial sector must meet additional prudential and regulatory preconditions.

Authorisation of money changers requires licensing, minimum capital, KYC/AML compliance and Reserve Bank oversight for operations and branches.
The Reserve Bank's Master Circular prescribes that entities conducting money-changing business must obtain licences, meet company registration and minimum Net Owned Funds criteria, file specified incorporation and audited financial documentation, implement KYC/AML/CFT policies, and satisfy 'fit and proper' tests for entities and directors; licences and branch or franchise approvals are subject to Reserve Bank clearance, commencement timelines and ongoing reporting, audit and supervisory requirements.

Compounding of contraventions under FEMA enables voluntary resolution of admitted foreign exchange breaches upon quantified payment.
The circular consolidates the Reserve Bank's procedure for compounding of admitted contraventions under FEMA, 1999 and the Compounding Proceedings Rules, 2000. It sets out institutional competence (RBI versus Directorate of Enforcement), delegation of powers to specified officers and Regional Offices, application format and annexure requirements for FDI/ECB/ODI/LO BO cases, timelines for disposal, factors for quantification of the compounding sum, and post compounding consequences including payment, certificate of realization and ineligibility where statutory approvals are lacking or repeat contraventions occur within three years.

Remittance facilities under FEMA govern repatriation of income and sale proceeds subject to tax, documentation, and bank verification.
The Circular consolidates FEMA rules permitting remittance of current income and repatriation of balances and sale proceeds by NRIs/PIOs and eligible foreign nationals through NRO/NRE/FCNR(B) accounts, subject to documentary evidence, income tax compliance and satisfaction of authorised dealers. It allows re designation of resident accounts as NRO accounts for departing foreign nationals to receive bona fide dues, prescribes limits and property specific repatriation rules for immovable property bought with foreign exchange, excludes specified nationalities from certain facilities, and requires AD Category I banks to implement controls, obtain declarations, and verify tax payment before permitting repatriation.

Establishment of foreign offices requires RBI permission, AD bank routing and ongoing reporting and audit compliance.
Establishment of foreign Liaison, Branch and Project Offices in India requires prior permission under FEMA routed through AD Category I banks to the Reserve Bank or, where applicable, the Government Route. Eligibility turns on sectoral FDI permissibility, prescribed track record and minimum net worth or parental Letter of Comfort. Approved offices receive a Unique Identification Number, must obtain tax registration, and comply with reporting, annual audit certification, and RBI/AD scrutiny; closure and remittance require auditor certificates, tax clearance and RBI specified documentation.

Liberalised Remittance Scheme permits resident individuals to remit abroad for permitted transactions subject to compliance and reporting.
Consolidates permissions and operational instructions under FEMA for release and use of foreign exchange by residents: Authorised Dealers may release foreign exchange for specified non trade current account purposes within delegated ceilings, apply self declaration for certain remittances, observe KYC/AML and record keeping obligations, enforce surrender and retention rules for unspent foreign exchange, and implement the Liberalised Remittance Scheme permitting resident individuals to remit abroad for permitted current or capital transactions subject to PAN, reporting and exclusions; additional provisions cover international cards, prepaid travel card redemption, guarantees for import of services and loans to NRI/PIO close relatives under LRS.

Foreign exchange derivatives rules govern permissible hedges, eligibility, documentation and reporting requirements for market participants.
Master Circular prescribes the regulatory framework for foreign exchange risk management and inter bank dealings: authorised derivative products, eligible users and detailed operational safeguards including documentary evidence, undertakings, auditor certifications, tenor/notional and rebooking/rollover rules tied to underlying exposures. It sets prudential requirements for AD Category I banks on product offering, user suitability, position limits, CRAR linked eligibility, commodity and freight hedging routes, and extensive reporting and disclosure obligations to the Reserve Bank.

Acquisition and transfer of immovable property by non-residents: regulated permissions, repatriation limits and payment routes.
Acquisition and transfer of immovable property in India by NRIs and PIOs is permitted for residential and commercial property (excluding agricultural land/plantation/farm houses) with payments only by inward remittance or debit to permitted non resident accounts; repatriation of sale proceeds requires compliance with lawful acquisition, limits to amounts representing permitted foreign exchange or non resident account balances, and is subject to RBI permission or authorised dealer conditions, while inheritance, diplomatic purchases, business establishment acquisitions, country specific prohibitions, and tax compliance are governed by prescribed declarations and approvals.

Rupee Drawing Arrangements: rules for opening and operating non resident Exchange House vostro accounts with strict KYC and reporting.
The Circular establishes rules for opening, funding, operation and oversight of Rupee and foreign currency vostro accounts of non resident Exchange Houses under Rupee Drawing Arrangements and Foreign Currency Drawing Arrangements. It prescribes permitted inbound remittance uses, credit only account operations, separate accounts per arrangement, three operational procedures (DDA, Non DDA, Speed Remittance) with corresponding audit/inspection and collateral regimes, strict KYC/AML/CFT compliance, periodic internal and external reviews, and specified reporting and Board approval requirements to the Reserve Bank.

NRO account rules set eligibility, permissible credits/debits and repatriation controls with documentation and tax compliance required.
Master Circular consolidates rules for Non-Resident Ordinary Rupee (NRO) Accounts: persons resident outside India may open NRO accounts (various types) for bona fide rupee transactions; specific nationality and documentation conditions apply. It lists permissible credits (inward remittances, legitimate Indian dues, sale proceeds, resident gifts/loans within liberalised limits) and debits (local rupee payments, remittance of current income, transfers/repatriation for bona fide purposes subject to an annual ceiling and tax compliance). Repatriation of sale proceeds and balances requires documentary evidence, tax payment, and is subject to nationality-based restrictions and Reserve Bank permissions in certain cases.

Money Transfer Service Scheme rules require authorised Indian agents to meet eligibility, KYC/AML, collateral and reporting obligations.
Regulation of inward personal remittances under the Money Transfer Service Scheme (MTSS) permits only specified inward personal transfers and requires Reserve Bank authorisation for Indian Agents drawn from defined financial entities that meet minimum Net Owned Funds and documentary conditions. Overseas Principals must be regulated, AML compliant and meet minimum net worth and due diligence standards; collateral must be maintained and reviewed. Indian Agents retain responsibility for Sub Agent due diligence, KYC/AML/CFT compliance, periodic reporting, audits and inspections, and permissions are time limited and renewable subject to continued conformity with RBI requirements.

Tax Deduction at Source on remittances requires authorised dealers to apply updated income-tax information rules; FEMA guidance withdrawn.
Authorised Dealers must apply the revised income-tax information-furnishing rules for deduction of tax at source on remittances to non-residents effective October 1, 2013, and ensure compliance with tax-law requirements when allowing outward remittances; the Reserve Bank will not issue separate FEMA instructions on these tax-deduction procedures and Authorised Dealers should seek clarification from the tax administration while observing any other statutory permissions required.

Industrial classification update NIC-2008 adoption for activity classification, affecting licensing, approvals and registration processes nationwide.
Adoption of NIC-2008 in place of NIC-1987 for classification of activities in industrial licence and IEM proposals; immediate application of NIC-2008 to submissions to the Department of Industrial Policy & Promotion to align classification with contemporary economic structure, improve investor-friendliness and facilitate approvals, registrations and categorisation.