Foreign currency borrowings framework updated: three routes defined with eligibility, permitted end uses, maturities and reporting obligations.
Amendments restructure Regulation 6 to permit resident persons to raise foreign currency borrowings via an Automatic Route, an Approval Route with prior Reserve Bank permission, or as Trade Credit, each governed by separate Schedules specifying eligible borrowers and lenders, permitted end uses and prohibitions, minimum average maturities, all in cost ceilings, security, prepayment, parking of proceeds abroad, loan registration, drawdown and reporting requirements; the Reserve Bank may approve borrowings outside the Schedules on such terms as it considers necessary.

Foreign investment conversion rules permit equity issuance for royalty or ECB conversion, subject to pricing and sectoral caps.
Amendments allow Indian companies eligible under the Schedule to issue equity/preference shares to non-residents in consideration for conversion of royalty/lumpsum fees or conversion of ECB, subject to pricing guidelines and sectoral foreign equity caps. Conversion of royalty/lumpsum fee or ECB is expressly treated as consideration for issue of shares, and acquisitions beyond sectoral limits include such conversions. Reporting requirements mandate ECB-2 for full conversions and Form FC-GPR for converted portions with ECB-2 for non-converted portions.

Guarantee permissions for foreign airlines and IATA authorised on behalf of IATA approved travel agents clarified by amendment.
Amendment permits issuance of guarantees in favour of foreign airlines and the International Air Transport Association (IATA) on behalf of IATA approved travel agents, inserting an express proviso into the Foreign Exchange Management (Guarantees) Regulations, 2000 that clarifies guarantees may lawfully be given to secure obligations of IATA-approved travel agents.

Current account remittance rules amended to permit transponder hiring charges and set limits for commissions on property sales abroad.
The amendment revises Schedules II and III of the Current Account Transactions Rules: it permits remittance of hiring charges of transponders by TV channels and internet service providers; omits specified existing schedule items; replaces item eleven to regulate commission per transaction to agents abroad for sale of residential flats or commercial plots in India by reference to a prescribed threshold; substitutes item sixteen to allow remittance for purchase of trademark or franchise in India.

Change of nomenclature: Exchange Control Department recharacterised as Foreign Exchange Department, aligning regulatory references accordingly.
The notification directs that all references to the term Exchange Control Department and its abbreviation in Reserve Bank regulations shall be read as Foreign Exchange Department and the corresponding abbreviation, exercising powers under the Foreign Exchange Management Act to effect a nomenclature substitution so that regulatory texts consistently reflect the new departmental designation.

Definition of NRI redefined to align with Deposit Regulations; country reference removed and retrospective effect clarified.
The Fourth Amendment revises FEMA (Transfer or Issue of Security by a Person Resident Outside India) Regulations by substituting Regulation 2(vii a) so that NRI means as defined in the Foreign Exchange Management (Deposit) Regulations, 2000, and by deleting "or Sri Lanka" from Regulation 5(1); a corrigendum clarifies footnote numbering and states that no person will be adversely affected by retrospective effect.

Repatriable deposits restricted: companies cannot accept repatriation deposits from non resident Indians; non repatriable allowed via NRO.
The amendment bars companies and statutory bodies from accepting deposits on a repatriation basis from non resident Indians; renewals of previously accepted repatriation deposits are permitted only under Schedule 6. Companies, bodies corporate, proprietary concerns and firms may accept deposits on a non repatriation basis subject to Schedule 7, which requires receipt of the deposit exclusively by debit to an NRO account and prohibits the deposit representing inward remittances or transfers from NRE/FCNR(B) accounts.

Direct investment outside India: conditions and approvals required for Indian parties investing abroad under FEMA regulations.
The Regulations prohibit residents from issuing or transferring foreign securities except under the Act or with Reserve Bank permission, and establish a detailed permission framework for Direct Investment outside India in JV/WOS subject to a 100% net-worth financial commitment ceiling (with specified inclusions), prescribed funding routes (EEFC balances, authorised dealer drawals, capitalisation of export dues, ADR/GDR proceeds, ECBs), eligibility conditions, designated authorised-dealer routing, valuation requirements, sectoral restrictions, reporting obligations including AP Rs and Unique Identification Numbers, and an Automatic Route for FCCBs with issuance standards and post-issue reporting.

Remittance entitlement for NRIs allows yearly transfers from NRO balances and inherited assets subject to documentation and tax clearance.
Regulation 4(3) is rephrased to allow an NRI/PIO to remit up to the annual ceiling from NRO balances, sale proceeds, or assets acquired by inheritance/legacy upon production of documentary evidence and a tax clearance/no objection certificate; remittance under a parental or close relative settlement requires the original deed and tax clearance; sale proceeds of immovable property acquired otherwise are remittable only if held as eligible investments for at least ten years; multiple instalments must be made through the same Authorised Dealer.

Credit rating requirement for eligible foreign investments set; only bank instruments with specified agency ratings permitted.
Amendment requires that deposits, Certificates of Deposit or other bank instruments offered to persons resident outside India be issued by banks rated by recognised international agencies and that such ratings are not less than the minimum rating prescribed by the regulator; the amendment is effective immediately under authority of the Foreign Exchange Management Act.

Third-party repayment by a relative permitted: relatives may credit borrowers' loan accounts through their bank accounts.
Regulation 8(d) is amended to permit crediting of a borrower's loan account "by any relative of the borrower in India by crediting the borrower's loan account through the bank account of such relative," and defines "relative" by reference to Section 6 of the Companies Act, 1956. The change explicitly authorises funds routed through a relative's bank account for the utilization of the loan under the Borrowing and Lending in Rupees Regulations.

Foreign exchange regulation updates: export value thresholds redefined in foreign currency and increased for specified categories.
Amendment to Regulation 4 of the Foreign Exchange Management (Export of Goods and Services) Regulations, 2000 substitutes a USD-denominated threshold for the former rupee-denominated threshold in clause (d) and increases the rupee threshold in clause (e) by textual substitution; the amendment is effective on publication in the Official Gazette and constitutes a partial modification of the principal regulations.

Loans in rupees to non-residents: permitted under authorised dealer board policy with strict use, account, and repayment limits.
Authorised Dealers may grant loans in rupees to non-residents under Board-approved loan policy, subject to prohibitions on use for chit funds, Nidhi companies, agriculture/plantation, real estate/farmhouses, TDR trading, and capital market investments including margin trading and derivatives; compliance with Reserve Bank directives is required. Loan amounts must not be credited to NRE/FCNR(B) accounts or remitted outside India, and repayments must be effected by inward remittances through normal banking channels or by debit to NRE/FCNR(B)/NRO accounts.

Prior approval requirement: declarations must be submitted to authorised dealer; exporters must receive reasonable opportunity to represent.
Amendment requires that export-related declarations be submitted to the authorised dealer for prior approval, which may be granted, withheld, or made subject to conditions specified by the Reserve Bank, and further provides that no Reserve Bank direction or authorised dealer withholding of approval shall occur unless the exporter has been given a reasonable opportunity to make representations.

Foreign currency account limit removed; amendment deletes prior cap allowing broader foreign currency holdings under FEMA regulations.
Amendment deletes the monetary ceiling previously specified in sub paragraph (iv) of paragraph 3 of the Schedule to the Foreign Exchange Management (Foreign Currency Accounts by a Person Resident in India) Regulations, 2000 by removing the words imposing a limit; the amendment is titled accordingly and comes into force on publication in the Official Gazette under powers conferred by the Foreign Exchange Management Act.

Guarantee requirement: overseas bank guarantees now mandatory for larger foreign-currency loans, strengthening lender security.
The Reserve Bank of India amended the borrowing or lending in foreign exchange regulations to require that when a loan exceeds the prescribed threshold, the overseas borrower must furnish a guarantee from a bank of international repute located outside India in favour of the lender, creating a mandatory external bank-guarantee security condition for larger cross-border loans; the amendment is effective on publication in the Official Gazette.

Foreign investment liberalisation allows full foreign investment in sectors not listed in Annexure A under amended FEMA regulations.
Amendment adds Item 21 to Schedule 1, Annexure B of the Regulations, permitting full foreign investment in any sector or activity not included in Annexure A, as a modification effected by the Reserve Bank of India under powers conferred by the Foreign Exchange Management Act, effective on publication in the Official Gazette.

Annual individual capital account foreign exchange limit allows drawal for Schedule I transactions; remittances to FATF non-cooperative jurisdictions prohibited.
Permits a resident individual to draw foreign exchange up to an annual specified limit for capital account transactions in Schedule I, subject to the Act and other applicable provisions; where drawal exceeds the annual limit, transaction-specific limits apply. Foreign exchange drawn under the annual limit shall not be used for remittance, directly or indirectly, to jurisdictions designated by the FATF as non-cooperative and communicated by the Reserve Bank.

Foreign currency account credits: insurance policy foreign-currency proceeds now permitted for resident individuals under amended FEMA regulations.
Regulation 5 is amended to permit as admissible credits the proceeds of life insurance policy claims, maturities and surrender values settled in foreign currency from an insurance company in India permitted by the Insurance Regulatory and Development Authority. Regulation 5A replaces 'A person resident in India' with 'A resident Individual' and adds an equivalent provision listing such life insurance foreign currency earnings as permissible receipts for resident individuals.

Foreign institutional investor portfolio investment: registered FIIs may buy shares/convertible debentures with specified account and funding rules.
Registered FIIs may purchase shares and convertible debentures under the Portfolio Investment Scheme through registered brokers on recognised Indian stock exchanges. FIIs may open Foreign Currency Accounts and/or Special Non Resident Rupee Accounts for routing transaction receipts and payments, funded by inward remittance or net sale proceeds, with funds usable for purchases under the Scheme or for remittance abroad and transferable between the two account types. Domestic asset managers or portfolio managers registered as FIIs for sub accounts may invest on behalf of non resident individuals and foreign corporates using funds brought from outside India.