Prior approval requirement for establishing liaison or branch offices by Hong Kong and Macau entities in India reiterated.
Entities registered in or resident of Hong Kong and Macau must obtain prior Reserve Bank approval before establishing a liaison office, branch office, project office or any other place of business in India under Regulation 4; AD Category I banks should notify their constituents. The Regulations were amended in 2013 to incorporate this requirement and the directions are issued under the foreign exchange statute without prejudice to other legal permissions.

Forward contract cancellation and rebooking allowed for contracted current and short term capital account exposures, with limited rebooking for portfolio investors.
Permits cancellation and rebooking of forward contracts for contracted current account transactions and for contracted capital account transactions with residual maturities of one year or less; portfolio investors may rebook only a capped portion of cancelled contracts, though rollovers on or before maturity are permitted; AD Category I banks must inform constituents; directions issued under the Foreign Exchange Management Act and subject to other required approvals.

Line of Credit export financing requires major domestic supply content and specific L/C/disbursement timelines under FEMA directions.
Exim Bank's Line of Credit to Sudan finances eligible exports for the Mashkour Sugar Project, requiring at least 75 per cent of contract value supplied from India and permitting up to 25 per cent procurement abroad; the Credit Agreement fixes distinct deadlines for L/C opening and disbursement for project and 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 after full realization, subject to prevailing rules. AD Category I banks must notify exporters and the directions are issued under FEMA.

Retention and transfer of foreign assets: residents may hold and utilise foreign assets acquired while non resident under specified conditions.
Section 6(4) FEMA allows residents to hold, transfer or invest in foreign currency, foreign securities or immovable property abroad if acquired or owned while non resident or inherited from a non resident. Covered transactions include foreign currency accounts maintained when non resident; income from employment, business, vocation or investments undertaken while non resident; gifts or inheritances received while non resident; and foreign exchange or related income held outside India acquired by inheritance. Residents returning to India may utilise eligible assets abroad and related income or sale proceeds for payments or fresh investments abroad without RBI approval, provided such payments and investments are funded exclusively from those eligible assets and comply with FEMA.

Line of Credit conditions require predominant Indian supply content and prescribe disbursement, documentation and commission rules.
Exim Bank has extended a LOC of USD 42.61 million to the Government of Benin to finance eligible Indian-sourced goods, services, machinery, equipment and consultancy for water-supply upgrades, requiring at least 75 percent Indian supply content and permitting 25 percent foreign procurement. The LOC specifies effectiveness and disbursement timelines, mandatory GR/SDF shipment declarations, prohibition of agency commission from LOC funds (with limited exporter-funded alternatives), and directions issued under the Foreign Exchange Management Act; AD Category-I banks must inform exporters and refer them to Exim Bank for details.

Rupee Drawing Arrangements expanded to allow utility, tax and EMI remittances from non-resident exchange house vostro accounts.
Rupee Drawing Arrangements with non-resident exchange houses are expanded to include additional permitted transactions through vostro accounts while retaining their focus on personal remittances and preserving the prohibition on routing donations. The amendment expressly permits payments to utility service providers in India, tax payments in India, and EMI repayments to banks and NBFCs, alongside pre-existing permitted items such as credits to non-resident rupee accounts, family payments, insurance and investment premia, education and medical expenses, hotel and travel bookings, and limited trade transactions, with all other instructions remaining operative.

Resident bank account joint operation: non-resident close relatives may be joint holders on either-or-survivor basis subject to conditions.
Non-resident close relatives may be joint holders in resident bank accounts on an Either or Survivor basis while the account remains a resident bank account; the NRI cannot credit their own proceeds, may operate the account only for the resident for domestic payments without creating beneficial interest, and must notify the bank to reclassify the account as NRO if they become the survivor, with banks obtaining a signed FEMA compliance declaration.

Optionality clauses in FDI instruments permit investor exit at prevailing market-linked price after applicable lock-in period.
Permits inclusion of optionality clauses in equity and in compulsorily/mandatorily convertible securities issued to non residents under the FDI scheme, requiring buy back at the price prevailing at exercise so investors exit without assured returns. A minimum lock in period applies from allotment. After lock in, listed investees permit exit at recognised exchange market price; unlisted investees permit exit not exceeding a price based on Return on Equity from the latest audited balance sheet; CCDs and CCPS may be priced at an internationally accepted methodology certified by a Chartered Accountant or SEBI registered merchant banker.

Non-compete restriction in pharmaceutical FDI: clauses prohibited except in special cases with FIPB approval now required
Foreign direct investment in pharmaceuticals remains at 100% for both greenfield (automatic approval) and brownfield (government approval subject to conditions). Newly imposed restriction disallows non-compete clauses except in exceptional cases with prior approval from the designated foreign investment approval authority; this restriction takes immediate effect.

Infrastructure classification broadened: MRO now treated as airport infrastructure for External Commercial Borrowings eligibility.
For ECB purposes the Airport sub sector in the Transport Sector of Infrastructure is expanded to treat Maintenance, Repairs and Overhaul (MRO) as part of airport infrastructure; services not constituting infrastructure remain excluded. All other ECB policy provisions are unchanged and AD Category I banks must inform constituents; the directions are issued under statutory foreign exchange powers without prejudice to other legal permissions.

Issue of non-convertible bonus preference shares permitted to non-resident shareholders under approved scheme, subject to tax no-objection.
An Indian company may issue non-convertible/redeemable preference shares or debentures to non-resident shareholders, including depositories for ADR/GDR holders, by way of bonus distribution from general reserves under a Scheme of Arrangement approved by an Indian court, subject to no-objection from the Income Tax Authorities; other types of preference shares and convertible debentures remain subject to existing FDI circulars.

Rollover of guarantees: not treated as new financial commitment if conditions on end use, terms, reporting, and investigations are met.
Rollover of guarantees for Overseas Direct Investment will not be treated as a fresh financial commitment if the original guarantee was issued under then-prevailing FEMA guidelines, the end use by the JV/WOS/step-down subsidiary remains unchanged, no terms or amount change occurs except for validity, the rollover is reported in Part II of Form ODI, and any ongoing investigations are notified; otherwise prior Reserve Bank approval via the designated Category I Authorised Dealer bank is required.