Carry forward of unspent administrative expenses permitted, with reporting in Form FC 4 and chartered accountant certification required.
Associations may carry forward the unspent part of allowable administrative expenses to the immediately succeeding financial year with reasons recorded in Form FC-4. Form FC-4 is amended to add a receipt item for transfer of the foreign contribution part of income tax refunds from non FCRA accounts, a detailed schedule for carry forward calculations and reasons, and expanded chartered accountant particulars and certification language requiring examination of FC 4 entries and disclosure of any violations.

Startup recognition for foreign currency accounts is aligned with the applicable national startup recognition framework across relevant account provisions.
Foreign Currency Accounts by a Person Resident in India regulations adopt a uniform definition of startup for Regulation 5 and Schedule I to the Exchange Earners' Foreign Currency Account Scheme. A startup is an entity recognised by the Department for Promotion of Industry and Internal Trade under the applicable startup-recognition framework, as amended from time to time. The amendments took effect on publication in the Official Gazette on 19 November 2024.

Compounding framework under FEMA enables administrative settlement of foreign exchange contraventions with prescribed authorities and procedures.
The rules create a compounding mechanism under the Act allowing specified compounding authorities-Director of Enforcement, authorised officers, and graded Reserve Bank and Directorate officers under supervisory control-to accept applications in the prescribed Form with fee and documents, call for further information, afford a hearing and issue dated signed compounding orders within a statutory timeframe; they also prescribe exclusions to compounding, payment methods and timelines for the compounded sum, and consequences of non payment, while ensuring copies of orders are provided to the applicant and Adjudicating Authority.

Swap of equity instruments permitted between residents and non-residents subject to government rules, RBI regulations and required approvals.
The rules align the definition of control with the Companies Act and LLPs, define startup company by DPIIT identification, mandate prior Government approval wherever applicable for transfers, and allow swaps of equity instruments and equity capital between residents and non-residents subject to Central Government rules, RBI regulations and prior Government approval. The amendments exclude certain NRI/OCI owned Indian-entity investments on a non-repatriation basis from indirect foreign investment calculations, add White Label ATM Operations under automatic entry with conditions, clarify FPI investor group treatment, and permit startup equity issuances subject to sectoral caps and conditions.

Foreign investment in sovereign green bonds is permitted through IFSC securities accounts, with specified payment and repatriation arrangements.
Persons resident outside India maintaining a securities account with a depository in an IFSC may purchase or sell Sovereign Green Bonds issued by the Government of India, subject to specified terms and conditions. Purchase consideration must be paid through inward remittance via banking channels or eligible foreign currency account funds. Sale or maturity proceeds, net of applicable taxes, may be remitted outside India.

Interest-bearing accounts for margin posting allowed for non-residents in local or foreign currency for permitted derivative contracts.
An authorised dealer in India may allow a person resident outside India to open, hold and maintain an interest-bearing account in Indian rupees and/or foreign currency for the purpose of posting and collecting margin in India for a permitted derivative contract entered into by such person under the Margin for Derivative Contracts Regulations, 2020, subject to directions issued by the Reserve Bank.

Cross-border margining: authorised dealers may post and collect derivatives margin internationally under Reserve Bank directions, including for branches.
The amendment recognises credit derivative contracts under the Master Direction on Credit Derivatives and substitutes Regulation 4 to permit authorised dealers to post and collect margin and receive/pay interest in India and abroad for permitted derivative contracts with non-residents, between authorised dealers (where one is a foreign bank branch), and for overseas branches and IFSC Banking Units, subject to terms, conditions and directions issued by the Reserve Bank.

International exchange equity transactions require prescribed payment channels, remittance of sale proceeds, and foreign portfolio investment reporting.
Schedule XI establishes payment, remittance and reporting requirements for purchase or subscription of equity shares of Indian companies listed on an International Exchange by permissible holders. Consideration must be paid through banking channels to an eligible foreign currency account of the Indian company or through inward remittance. Sale proceeds, net of taxes, may be remitted outside India or credited to the permissible holder's eligible bank account. Form LEC (FII) reporting covers specified International Exchange purchases or subscriptions classified as Foreign Portfolio Investment, excluding transfers between permissible holders.

Foreign currency accounts for offshore capital raising may retain proceeds abroad pending utilisation or repatriation, subject to compliance conditions.
Funds raised through External Commercial Borrowings, American Depository Receipts, Global Depository Receipts, or direct listing of equity shares of Indian incorporated companies on international exchanges may be retained in foreign currency accounts with banks outside India pending utilisation or repatriation to India. Such retention is subject to compliance with the applicable conditions governing the relevant financing route.

Foreign investment in space sector: automatic up to defined thresholds, government approval beyond those thresholds; manufacturing allowed automatic.
Substitutes Schedule I entry for the space sector to classify space activities-satellite manufacturing and operation, satellite data products, ground and user segments, launch vehicles and spaceports, and component manufacturing-and prescribes which investments are on the automatic route and which require government approval beyond specified thresholds; manufacturing of components is on the automatic route. Investee entities must follow sectoral guidelines issued by the space authority. Detailed definitions of the covered activities are provided.

Partly paid-up units inclusion expands 'unit' definition under non-debt instrument rules, subject to SEBI regulations.
An Explanation is inserted into clause (aq) of rule 2 of the Foreign Exchange Management (Non-debt Instruments) Rules, 2019 clarifying that unit includes partly paid up units permitted under regulations framed by the Securities and Exchange Board of India in consultation with the Government of India.

Direct listing on international exchanges enables Indian public companies to issue equity abroad subject to compliance and foreign holding limits.
The amendment permits Indian public companies to issue or existing shareholders to offer equity shares on specified International Exchanges under a Direct Listing Scheme, establishes "permissible holder" rules (excluding residents and requiring government approval where holders have connections to bordering countries), prescribes eligibility exclusions (debarred persons, wilful defaulters, entities under investigation, fugitive economic offenders), mandates compliance with Indian securities, depository, foreign exchange and AML laws, limits aggregate foreign holdings to Schedule I caps, requires voting by permissible holders or via custodians with instructions, and sets pricing norms aligned with domestic issuance or fair market value.