Foreign investment rules amended to reshape FPI transfers, convertible pricing, sectoral conditions, and local sourcing obligations.
Amendments to the Foreign Exchange Management (Non-debt Instruments) Rules, 2019 revise commencement and definitions, remove a repatriation restriction, and restate FPI equity transfer rules subject to Schedule and SEBI conditions while preserving Government approval where required. Convertible equity instruments must fix conversion price or formula at issuance and conversion price cannot be lower than issuance fair value. Schedule changes clarify coal mining and associated processing infrastructure, expand manufacturing and e-commerce sale permissions, require e-commerce marketplace statutory auditor reports, classify certain digital streaming activity, make specific entry routes automatic, and revise SBRT local sourcing and operational conditions. Schedule II permits FPI acquisitions and company resolutions to raise aggregate limits up to sectoral caps.

Re-export of leased aircraft permitted when repossessed and DGCA de-registered on IDERA request, subject to DGCA/MoCA permission.
The Regulations were amended to permit re-export of leased aircraft, helicopters, engines and APUs repossessed by an overseas lessor and de registered by the DGCA at the request of the IDERA holder under the Cape Town Convention, provided such re-export is authorised by the DGCA and the Ministry of Civil Aviation.

Special NonResident Rupee Account expanded to permit business INR transactions while fixing tenure, nomenclature, segregation, and nominee rules.
The amendment defines the Special NonResident Rupee Account (SNRR account) for non-residents with business interest to carry out bona fide INR transactions, enumerates permitted categories (investments, imports, exports, trade credit/ECB lending, and specified IFSC unit receipts), requires business-specific account nomenclature and category-wise segregation, mandates certain provisions by substituting "shall" for "should", limits account tenure to the contract/business period not exceeding seven years with specified exceptions, and prescribes that nominee payments on death be credited to the nominee's NRO/NRE account or remitted through banking channels.

Special Non Resident Rupee accounts now permitted for rupee receipts and payments subject to compliance with foreign exchange law.
The amendment inserts a definition of Special Non-Resident Rupee account and authorises rupee receipts and payments to and from SNRR accounts maintained by non-residents with an Authorised Dealer or Authorised Bank in India. Payments by debit to FCNR, NRE or SNRR accounts for overseas buyers and credits to SNRR accounts for overseas sellers are permitted, and rupee transfers to or from SNRR accounts are allowed provided the underlying transactions conform with the Foreign Exchange Management Act, 1999 and subordinate rules, regulations and directions.

Foreign investment entry routes and sectoral caps govern cross-border equity transactions and pricing under FEMA non-debt rules.
These rules govern foreign investment in non-debt instruments under FEMA by defining covered instruments and actors, prescribing entry routes (automatic or government) and sectoral caps, and setting conditions for issuance, acquisition, transfer, pledging and pricing of equity and related instruments. Distinct Schedules allocate rules for FDI, FPIs, NRIs/OCIs, FVCIs, LLPs, investment vehicles, depository receipts and IDRs. Pricing must follow SEBI guidelines for listed securities and certified arm's length valuations for unlisted securities; transfers that alter ownership or control must comply with entry routes, caps, conditionalities and RBI reporting.

Foreign investment in debt instruments regulated with specified permitted instruments, payment routes and remittance conditions.
These Regulations set out the framework for investments in Indian debt instruments by persons resident outside India, defining permissible instruments, distinguishing repatriation and non-repatriation bases, prescribing modes of payment through specified non-resident accounts or inward remittance, and regulating sale, redemption and remittance of proceeds through authorised dealers subject to taxes, prescribed conditions and regulatory approvals.

Mode of payment and reporting requirements govern foreign investment remittances and mandatory filings for non debt instruments.
Regulations prescribe mode of payment for non debt instrument investments by persons resident outside India-requiring inward remittance through banking channels or use of specified non resident accounts (NRE, FCNR(B), foreign currency accounts, SNRR, NRE(PIS), NRO) depending on investor class-and permit remittance or credit of sale, maturity or disinvestment proceeds as specified. A detailed reporting regime mandates particular forms (FC GPR, FLA, FC TRS, ESOP, DRR, LLP(I)/(II), LEC(FII)/LEC(NRI), InVI, DI, CN) with stipulated filing timelines, generally through Authorised Dealer banks; delays attract late submission fees.

Debt instrument designation under FEMA clarifies classification of government bonds, corporate bonds and other instruments as debt.
The Central Government designates specified classes as debt instruments under FEMA, including government bonds, corporate bonds, non equity securitisation tranches, borrowings by Indian firms through loans, and depository receipts backed by debt. It separately lists categories treated as non-debt instruments-equity investments, LLP capital participation, instruments under FDI policy, units of AIFs/REITs/InVITs, mutual fund/ETF units with majority equity, the equity tranche of securitisations, immovable property dealings, trust contributions, and depository receipts against equity-and provides that all other unlisted instruments shall be deemed debt instruments.

Commencement of Finance Act provisions brings specified foreign exchange management sections into force on 15 October 2019.
The Central Government, exercising its statutory commencement power, appoints 15 October 2019 as the date on which specified provisions of the Finance Act, 2015 relating to foreign exchange management shall come into force, by a Ministry of Finance notification under the Act's commencement authority.

Affidavit requirement for office bearers: mandatory individual affidavits and eligibility certification for foreign contribution applications.
Applications under Forms FC-3A, FC-3B and FC-3C and the provision in rule 12 must include an individual affidavit by each office bearer, key functionary and member in Proforma 'AA', and each form is amended to require certification that those persons satisfy the eligibility criteria of subsection (4) of section 12 and that their affidavits are uploaded. Proforma 'AA' prescribes identity particulars, role affirmation, a duty to report breaches of eligibility by the organisation or its persons, and warns that false information is punishable.

Deposit Regulations amendment removes sub regulation three of regulation six, effective upon publication in the Official Gazette.
The Reserve Bank amends the Foreign Exchange Management (Deposit) Regulations, 2016 by deleting the entire sub regulation 3 of regulation 6. The amendment is effected under the Reserve Bank's powers in the Foreign Exchange Management Act and is titled the Foreign Exchange Management (Deposit) (Amendment) Regulations, 2019, coming into force upon publication in the Official Gazette.

Notification renumbering under FEMA adjusts official identifier while leaving substantive content unchanged.
Correction re-designates the notification number of the FEMA instrument from its original identifier to a new notification number while stating that all other contents of the Gazette notification remain unchanged, constituting an administrative renumbering without substantive amendment.

Exclusion from foreign source: International Solar Alliance declared not a foreign source under the FCRA, affecting regulatory scope.
The Central Government, under the power conferred by sub clause (ii) of clause (j) of sub section (1) of section 2 of the Foreign Contribution (Regulation) Act, specified by notification that the International Solar Alliance shall not be treated as a 'foreign source' for the purposes of the Act, creating a statutory exclusion from the Act's foreign contribution regime.

Foreign investment in municipal bonds expanded as non-residents permitted to purchase municipal debt under amended FEMA regulations.
The amendment defines Municipal Bonds as debt instruments issued by municipalities under Article 243Q and adds municipal bonds to Schedule 5 as permissible securities for purchase and sale by persons resident outside India, thereby including municipal debt within the FEMA regime for cross-border investment in non capital instruments.

Foreign contribution regulation: mandatory electronic filings, standardised FC forms, and PFMS integrated designated bank accounts required.
Amendments to the Foreign Contribution (Regulation) Rules, 2011 require electronic filing of applications and intimations, substitute and standardise forms (notably FC-3A, FC-3B, FC-3C and FC-6 series), and mandate designated FC bank accounts in core-banking compliant banks integrated with PFMS. The rules prescribe detailed form content for registration, prior permission, renewal, account returns and various change intimations, require governing body resolutions and specified enclosures, and tighten reporting, transfer and certification requirements to ensure utilisation complies with the Act's restrictions on national interest and public order.

Capital account restrictions with DPRK: transactions barred without Central Government approval; existing investments must be wound up within specified period.
Amendment prohibits persons resident in India from undertaking capital account transactions with DPRK citizens, residents, entities, or assets without specific Central Government approval, and mandates closure, liquidation, disposal or settlement of existing impermissible investments or offices in the DPRK within 180 days unless continued by specific Central Government approval.

Non interest foreign currency accounts allowed for ship manning and insurance brokers, subject to regulatory directions.
An authorised dealer may, subject to directions issued by the Reserve Bank, allow ship manning and crew managing agencies and re insurance and composite insurance brokers registered with the insurance regulator to open and maintain non interest bearing foreign currency accounts in India for the purpose of undertaking transactions in the ordinary course of their business.

Currency export restrictions allow limited carriage of new-series RBI notes to Nepal and Bhutan under amended Regulation 8.
The amendment substitutes Regulation 8(1) to permit an individual travelling from India to Nepal or Bhutan to carry Reserve Bank of India notes of the Mahatma Gandhi (new) Series of specified denominations up to a prescribed total limit, while maintaining prohibitions on taking or sending Indian currency and RBI notes above the stated denominations; it takes effect on publication in the Official Gazette under powers of the Foreign Exchange Management Act, 1999.

Derivative contracts permitted as capital account transactions; regulatory amendment allows residents and non residents to undertake them upon publication.
The amendment adds a definition of Derivative as a future settled financial contract whose value derives from financial or non financial variables and substitutes Schedule entries to allow persons resident in India to "Undertake derivative contracts," while adding a corresponding entry to permit persons resident outside India to undertake derivative contracts; the amendment takes effect on publication in the Official Gazette.

Foreign Portfolio Investor hedging under Voluntary Retention Route allowed with authorised dealer instruments, subject to RBI terms.
FPIs are permitted to enter into forward contracts, foreign currency-rupee option contracts, cost reduction structures or swaps with the rupee as one of the currencies with an Authorised Dealer in India to hedge currency risk on investments made under the Voluntary Retention Route, subject to such terms and conditions as may be stipulated by the Reserve Bank.