FDI acquisition on recognised exchange permitted for non residents subject to existing control and specified payment conditions.
A non resident, including an NRI, may acquire listed Indian company shares on a recognised stock exchange through a registered broker under the FDI Scheme if the investor has already acquired and continues to hold control under the SEBI Substantial Acquisition and Takeover Regulations; consideration may be paid as specified in paragraph 8 of Schedule 1 to Notification No. FEMA.20/2000 RB or out of dividends from the controlled Indian investee, provided the dividend right is established and the dividend is credited to a specially designated non interest bearing rupee account for acquisition.

Total foreign investment calculation clarified to aggregate direct and indirect holdings and regulate downstream investment compliance.
Guidelines aggregate direct foreign investment and indirect foreign investment to determine Total foreign investment in Indian companies, define ownership and control by resident or non-resident entities, limit indirect foreign investment for wholly owned downstream subsidiaries to the foreign investment in the holding company, require inclusion of portfolio and various foreign instruments in indirect investment computation, and mandate government approval, disclosures and compliance measures for establishment, transfer of ownership or control, and downstream investments in sectors with foreign investment caps.

Treatment of performance guarantees now counts partial exposure and requires prior approval where invocation breaches exposure limits.
Regulatory amendments treat fifty per cent of performance guarantees issued by an Indian party for its overseas JV/WOS as part of overseas financial commitments and require prior Reserve Bank approval if invocation would breach exposure ceilings; bank guarantees issued by resident banks on behalf of overseas JV/WOS and backed by counter-guarantee/collateral of the Indian party are fully included. The Regulations permit loans, corporate guarantees for first-generation step-down companies, personal guarantees by indirect resident promoters within limits, CCPS to be treated as equity, and allow listed Indian parties to write off up to twenty-five per cent of equity/receivables subject to documentation and reporting, with creation of charges on assets permitted with prior approval.

Guarantee by Indian promoters for overseas JV or WOS allowed, subject to compliance with transfer and issue regulatory conditions.
An Indian party promoting or setting up outside India a Joint Venture or a Wholly Owned Subsidiary may give guarantees to or on behalf of that JV or WOS in connection with its business, provided the terms and conditions in the Foreign Exchange Management (Transfer and Issue of Foreign Security) (Amendment) Regulations, 2004 continue to be complied with. An authorized dealer in India may also give such guarantees. The Indian party may also guarantee the obligations of the first generation step down operating company, and 'Indian Party' is defined as in the Transfer or Issue Regulations.

Foreign Currency Account rules permit resident Indians to hold FCAs abroad for overseas direct investment, subject to compliance.
An Indian party may open, hold and maintain a Foreign Currency Account abroad exclusively for overseas direct investment into a JV/WOS, provided the party is eligible under existing overseas direct investment regulations, the host country requires a designated account, and the FCA is maintained under host country law. Remittances into the FCA must be used only for the investment; dividends and entitlements must be repatriated within thirty days; annual debit/credit details must be submitted to the designated AD bank with a statutory auditor's certificate; and the FCA must be closed immediately or within thirty days after disinvestment or cessation.

Receipt of export proceeds: amendment permits other modes as per RBI directions to authorised dealers.
Regulation 3 is amended by inserting that any other mode of receipt of export proceeds for an export from India may be adopted in accordance with the directions issued by the Reserve Bank of India to authorised dealers from time to time.

Export realisation and repatriation: SEZ exporters now subject to standard period requirements following regulatory amendment.
The amendment deletes the proviso that exempted units in Special Economic Zones from the stipulation of period for realisation and repatriation of full export value, thereby making SEZ exports subject to the same realisation and repatriation timelines as other exporters; the change takes effect on publication in the Official Gazette under powers conferred by the Foreign Exchange Management Act.

Qualified Foreign Investors access an expanded securities list with specified investment ceilings and removed maturity restrictions.
Amendments to Schedule 5 substitute "eligible investors" for "FIIs", delete residual maturity stipulations, and authorise Qualified Foreign Investors to purchase specified instruments on a repatriation basis through SEBI registered QDPs or on recognised exchanges, including government securities, commercial paper, Security Receipts (with 10% individual and 49% aggregate tranche limits), Perpetual Debt (49% aggregate and 10% individual limits per issue), infrastructure non convertible debentures, IFC bonds, and rupee bonds/units of Infrastructure Debt Funds; parallel entitlements for SEBI registered long term investors are also prescribed, with conditions on primary issue listing and mandatory disposal/redemption where applicable, and all acquisitions remain subject to SEBI and Reserve Bank terms.

Acquisition of SWIFT equity permitted for licensed Indian banks, subject to SWIFT by laws and Reserve Bank admission approval.
The Reserve Bank grants a general permission permitting Indian banking companies licensed under the Banking Regulation Act to acquire shares of SWIFT, Belgium, in accordance with SWIFT by laws, provided the banking company obtains Reserve Bank permission for admission to the SWIFT User's Group in India; this insertion is made as Regulation 6D and takes effect on publication in the Official Gazette.

Trade credit limits revised: authorized dealers may approve supplier or buyer credits with specified maturities and no roll overs.
Amendments permit rescheduling and refinancing of foreign currency borrowings at a higher cost within the Reserve Bank's all-in-cost ceiling, with refinancing not reducing original outstanding maturity; they redefine trade credit and set AD approval parameters and maturity bands for trade credits, including a prohibition on roll-over beyond permissible periods, and are deemed effective from specified prior dates with clarification that retrospective effect will not adversely affect any person.

Eligibility for guarantees limited to persons eligible to raise foreign currency loans under FEMA borrowing regulations.
Amendment substitutes the proviso to Regulation 3A of the Principal Regulations, replacing the earlier limitation to companies engaged exclusively in infrastructure and infrastructure financial companies with the qualification: a person resident in India who is eligible to raise foreign currency loan under sub-regulation (1) of Regulation 6 of the Foreign Exchange Management (Borrowing or Lending in Foreign Exchange) Regulations, 2000 read with Schedule I thereto.

Authorised dealer guarantees permitted for non-resident acquisitions, subject to SEBI(SAST) compliance and bank counter-guarantee and tenure co-terminus with offer period.
An authorised dealer in India may give a guarantee on behalf of a person resident outside India acquiring shares or convertible debentures through open offers, delisting or exit offers provided the transaction complies with SEBI (SAST) Regulations, the guarantee is covered by a counter guarantee of a bank of international repute, and the guarantee is valid for a tenure co terminus with the offer period required under SEBI (SAST) Regulations.

Foreign exchange regulations: amended reporting forms for issuance or transfer of securities by non-residents; regulator specified formats now govern.
Amendments to Schedule 1 delete Annex D and Annex F and remove a sub paragraph of Paragraph 10. They replace fixed references to forms by requiring reports in form FC GPR and form FC TRS as specified by the Reserve Bank from time to time, thereby delegating specification and future modification of reporting formats to the regulator rather than embedding them in the Schedule.

Escrow account authorization for non-residents allows domestic currency escrow for acquisitions, subject to FEMA and SEBI compliance.
A non-resident may open an escrow account in India with an authorized dealer bank in domestic currency for acquisition of shares or convertible debentures through open offers, delisting or exit offers, subject to the terms of the Foreign Exchange Management (Deposit) Regulations and compliance with SEBI Substantial Acquisition of Shares and Takeovers Regulations; such escrow accounts may be funded by inward remittance through normal banking channels and/or by a guarantee from an authorized dealer bank under the Foreign Exchange Management (Guarantees) Regulations.

Overseas direct investment rules for resident individuals set eligibility, sectoral prohibitions, valuation and reporting obligations.
Resident individuals may make overseas direct investment in equity and compulsorily convertible preference shares of a JV or WOS abroad subject to Schedule V. Schedule V prohibits investment in real estate, banking, and financial services activities, bars investment in FATF non-cooperative jurisdictions, requires the JV/WOS to be an operating entity with no step-down subsidiaries, restricts investments to the ceiling under the Liberalised Remittance Scheme (including EEFC/RFC balances), mandates valuation as per the Principal Regulations, and prohibits additional financial commitments beyond permitted overseas direct investment.

Portfolio Investment Scheme reporting requires Unique Code registration and regular ORFS filing with reconciliation by banks.
The amendment requires the link office of a designated branch of an Authorized Dealer to obtain a Unique Code from the Reserve Bank and file consolidated PIS transaction reports for NRIs for the entire bank via the Online Report Filing System (ORFS), with periodic reconciliation through NRI holding reports. It permits NRIs to open separate NRE(PIS) and NRO(PIS) sub accounts for routing receipts and payments for PIS transactions, and specifies permitted credits and debits for those accounts while preventing non PIS proceeds from being credited to PIS accounts.

Foreign exchange hedging expanded: QFIs recognized and non-residents permitted rupee denominated ECB forward, option and swap hedges.
A definition for Qualified Foreign Investor is added; Regulation 6 is amended to omit and renumber specified authorisation provisions; Regulation 6A cross references are updated. Schedule I removes a provision on cancellation and rebooking of resident hedge contracts and inserts a reference to foreign currency loans against FCNR(B) deposits. Schedule II inserts QFIs into participant listings and adds a provision permitting non residents to enter forward, foreign currency rupee option or foreign currency rupee swap contracts with an Authorised Dealer to hedge rupee denominated external commercial borrowings subject to stipulated terms and conditions.

Guarantee limits for service imports set, with stricter prior approval requirements for public sector importers.
Guarantees may be issued in favour of a non-resident service provider on behalf of a resident service importer, subject to Reserve Bank terms and conditions. Monetary ceilings apply and where the service importer is a public sector company or government department/undertaking, prior approval of the Ministry of Finance is required for guarantees exceeding the lower ceiling. "Public Sector Company" is defined by reference to the Companies Act. The amendment is given retrospective effect with a clarification that no person will be adversely affected.

Currency carriage limits increased under amendment to export/import rules, raising the permissible cash travellers may carry across borders.
The amendment revises the monetary threshold for carrying currency on export and import by substituting the earlier figures in two operative clauses of the relevant regulation with a higher specified amount, thereby increasing the permissible cash threshold for persons moving currency across the border; the change is effected under the Reserve Bank's powers in the Foreign Exchange Management Act and commences on publication in the Official Gazette.

Manner of receipt and payment rules expanded to include new country groups and payment mechanisms, altering permitted currency flows.
Amendments adjust country groupings and table entries governing the manner of receipt and payment of foreign exchange, add Group 1A for Nepal and Bhutan and Group 1B for the Islamic Republic of Iran with specified payment rules, substitute country lists in the principal Regulation, include the Asian Clearing Union euro account alongside the dollar account, allow payments for Iran in any permitted currency subject to authorised dealers' directions for current transactions, and give specified retrospective effect without adversely affecting persons.