Approval from FIPB

[SHANTI NARAIN]

We are dealing in stainless steel products. We want to supply our products in India by our proposed 100% subsidiary. The Stainless steel will be imported from our 100% held Indian subsidiary and then sell to various wholesaler in India. Please let us know whether we require approval from FIPB for holding 100% shares in an Indian Company. Or it is under automatic route. Thank you.

[Guest]

There are certain restriction and sectoral cap for FIPB route for trading activities. You may refer to FEM (Transfer of Issue of Security by a person Resident Outside India) Regulation, 2000.

AI Summary

Company Seeks Guidance on 100% Shareholding in Indian Subsidiary via Automatic Route; FEM Regulation 2000 Advised A company dealing in stainless steel products seeks advice on whether it requires approval from the Foreign Investment Promotion Board (FIPB) to hold 100% shares in an Indian subsidiary for importing and selling products in India. The query highlights the intention to use the automatic route for this investment. The response indicates that there are restrictions and sectoral caps under the FIPB route for trading activities, and suggests consulting the FEM (Transfer of Issue of Security by a person Resident Outside India) Regulation, 2000 for guidance.