TaxTMI 
TaxTMI 
CONSOLIDATED FDI POLICY.
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.... 2.1 Definitions CHAPTER-3 ORIGIN, TYPE, ELIGIBILITY, CONDITIONS AND ISSUE/TRANSFER OF INVESTMENT 3.1 Who can invest in India? 3.2. Types of Instruments 3.3 Entities into which FDI can be made 3.4 Conditions on Issue/Transfer of Shares 3.5 Issue of Instruments PAGE NUMBER 55 5 88 14 14 15895 25 CHAPTER-4 CALCULATION, ENTRY ROUTE, CAPS, ENTRY CONDITIONS ETC. OF INVESTMENT 28 4.1 Calculation of Total Foreign Investment i.e. Direct and Indirect Foreign Investment in Indian Companies 28 4.2 Entry Routes for Investment 31 4.3 Caps on Investments 4.4 Entry conditions on Investment 4.5 Other conditions on Investment besides entry conditions 4.6 Downstream Investment by Indian Companies 4.7 Guidelines for consideration of FDI Proposals by FIPB 4.8 Constitution of FIPB 4.9 Approval Levels for cases under Government Route 4.10 Cases which do not require fresh Approval 4.11 Online filing of applications for FIPB/Government's approval 38 38 39 39 CHAPTER-5 POLICY ON ROUTE, CAPS AND ENTRY CONDITIONS 40 -333-6000220 34 5.1 PROHIBITION ON INVESTMENT IN INDIA ....
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....n for issue of shares / convertible debentures under the FDI scheme Annex-6 Know Your Customer (KYC) Form in respect of the non-resident investor 84 91 104 108 109 110 112 Annex-7 Form FC-TRS Annex-8 Form DR Annex-9 Form DR - Quarterly 113 118 120 4 CHAPTER 1: INTENT AND OBJECTIVE 1.1 INTENT AND OBJECTIVE 1.1.1 It is the intent and objective of the Government to promote foreign direct investment through a policy framework which is transparent, predictable, simple and clear and reduces regulatory burden. The system of periodic consolidation and updation is introduced as an investor friendly measure. 1.1.2 'Investment' is usually understood as financial contribution to the capital of an enterprise or purchase of shares in the enterprise. 'Foreign investment' is investment in an enterprise by a Non-Resident irrespective of whether this involves new capital or re-investment of earnings. Foreign investment is of two kinds (i) Foreign Direct Investment (FDI) and (ii) Foreign Portfolio Investment. 1.1.3 International Monetary Fund (IMF) and Organization for Economic Cooperation and Development(OECD) ....
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....egulations, Press Notes, Press Releases, Clarifications, etc. 1.1.6 The Circular 1 of 2010 and Circular 2 of 2010 issued by this Department on 31st March 2010 and 30th September 2010 respectively, consolidated into one document all the prior policies/regulations on FDI which are contained in FEMA, 1999, RBI Regulations under FEMA, 1999 and Press Notes/Press Releases/Clarifications issued by DIPP and reflected the current policy framework on FDI. The present consolidation subsumes and supersedes all Press Notes/Press Releases/Clarifications/ Circulars issued by DIPP, which were in force as on March 31, 2011, and reflects the FDI Policy as on April 1, 2011. This Circular accordingly will take effect from April 1, 2011. Its next revision will be published on 30.09.2011. the rescission of earlier Press 1.1.7 Notwithstanding Notes/Press Releases/Clarifications/Circulars, anything done or any action taken or purported to have been done or taken under the rescinded Press Notes/Press Releases/Clarifications/Circulars prior to April 1, 2011, shall, in so far as it is not inconsistent with those Press Notes/Press Releases/Clarification....
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....ian companies, which are owned and controlled by resident Indian citizens, have the power to appoint a majority of its directors in that company. 1 Review of FDI policy to include warrants and partly-paid shares is under consideration of the Government. 8 2.1.8 2.1.9 2.1.10 2.1.11 2.1.12 2.1.13 An entity is considered as 'Controlled' by 'non resident entities', if non-residents have the power to appoint a majority of its directors 'Depository Receipt' (DR) means a negotiable security issued outside India by a Depository bank, on behalf of an Indian company, which represent the local Rupee denominated equity shares of the company held as deposit by a Custodian bank in India. DRs are traded on Stock Exchanges in the US, Singapore, Luxembourg, etc. DRs listed and traded in the US markets are known as American Depository Receipts (ADRs) and those listed and traded anywhere/elsewhere are known as Global Depository Receipts (GDRs). 'Erstwhile Overseas Corporate Body' (OCB) means a company, partnership firm, society and other corporate body owned directly or indirectly to the extent of at least sixty percent by non-resident....
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....t 1956. 'Indian Company' means a company incorporated in India under the Companies Act, 1956. 'Indian Venture Capital Undertaking' (IVCU) means an Indian company:— (i) whose shares are not listed in a recognised stock exchange in India; (ii) which is engaged in the business of providing services, production or manufacture of articles or things, but does not include such activities or sectors which are specified in the negative list by the SEBI, with approval of Central Government, by notification in the Official Gazette in this behalf. 'Investing Company' means an Indian Company holding only investments in other Indian company/ (ies), directly or indirectly, other than for trading of such holdings/securities. 'Investment on repatriable basis' means investment, the sale proceeds of which, net of taxes, are eligible to be repatriated out of India and the expression ‘investment on non-repatriable basis' shall be construed accordingly. 10 2.1.23 2.1.24 2.1.25 2.1.26 2.1.27 2.1.28 'Joint Venture' (JV) means an Indian entity incorporated in accordance with the laws and regulations in India in whose capit....
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.... in India a business or vocation in India, or (c) for any other purpose, in such circumstances as would indicate his intention to stay in India for an uncertain period; (ii) any person or body corporate registered or incorporated in India, (iii) an office, branch or agency in India owned or controlled by a person resident outside India, (iv)an office, branch or agency outside India owned or controlled by a person resident in India. 'Person resident outside India' means a person who is not a Person resident in India. 'RBI' means the Reserve Bank of India established under the Reserve Bank of India Act, 1934. 'Resident Entity' means 'Person resident in India' excluding an individual. 'Resident Indian Citizen' shall be interpreted in line with the definition of 'person resident in India' as per FEMA, 1999, read in conjunction with the Indian Citizenship 12 2.1.36 2.1.37 2.1.38 2.1.39 2.1.40 Act, 1955. 'SEBI' means the Securities and Exchange Board of India established under the Securities and Exchange Board of India Act, 1992. ‘SEZ' means a Special Economic Zone as defined in Special Economic Zone Act, 2005.....
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....sectoral cap/statutory ceiling, as applicable, by the Indian Company concerned by passing a resolution by its Board of Directors followed by passing of a special resolution to that effect by its General Body. The aggregate FII investment, in the FDI and Portfolio Investment Scheme, should be within the above caps. (ii) The Indian company which has issued shares to FIIs under the FDI Policy for which the payment has been received directly into company's account should report these figures separately under item no. 5 of Form FC-GPR (Annex-1-A) (Post-issue pattern of shareholding) so that the details could be suitably reconciled for statistical/monitoring purposes. 14 (iii) A daily statement in respect of all transactions (except derivative trade) have to be submitted by the custodian bank in floppy / soft copy in the prescribed format directly to RBI to monitor the overall ceiling/sectoral cap/statutory ceiling. 3.1.5 No person other than registered FII/NRI as per Schedules II and III of Foreign Exchange Management (Transfer or Issue of Security by a Person Resident Outside India) Regulations of FEMA 1999, can invest/trade in capital of....
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....ated as FDI and counted towards FDI. 3.2.4 Issue of shares by Indian Companies under FCCB/ADR/GDR (i) Indian companies can raise foreign currency resources abroad through the issue of FCCB/DR (ADRs/GDRs), in accordance with the Scheme for issue of Foreign Currency Convertible Bonds and Ordinary Shares (Through Depository Receipt Mechanism) Scheme, 1993 and guidelines issued by the Government of India there under from time to time. (ii) A company can issue ADRs/GDRs if it is eligible to issue shares to persons resident outside India under the FDI Policy. However, an Indian listed company, which is not eligible to raise funds from the Indian Capital Market including a company which has been restrained from accessing the securities market by the Securities and Exchange Board of India (SEBI) will not be eligible to issue ADRs/GDRs. (iii) Unlisted companies, which have not yet accessed the ADR/GDR route for raising capital in the international market, would require prior or simultaneous listing in the domestic market, while seeking to issue such overseas instruments. Unlisted companies, which have already issued ADRs/GDRs in the international....
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....ia and directions issued by the Reserve Bank, from time to time. (ix) The pricing of sponsored ADRs/GDRs would be determined under the provisions of the Scheme of issue of Foreign Currency Convertible Bonds and Ordinary Shares (Through Depository Receipt Mechanism) Scheme, 1993 and guidelines issued by the Government of India and directions issued by the Reserve Bank, from time to time. 3.2.5 (i) Two-way Fungibility Scheme: A limited two-way Fungibility scheme has been put in place by the Government of India for ADRs/GDRs. Under this Scheme, a stock broker in India, registered with SEBI, can purchase shares of an Indian company from the market for conversion into ADRs/GDRs based on instructions received from overseas investors. Re- 17 issuance of ADRs/GDRs would be permitted to the extent of ADRs/GDRs which have been redeemed into underlying shares and sold in the Indian market. (ii) Sponsored ADR/GDR issue: An Indian company can also sponsor an issue of ADR / GDR. Under this mechanism, the company offers its resident shareholders a choice to submit their shares back to the company so that on the basis of such shares, ADRs/GDRs can be is....
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....6 of this Circular. If a domestic VCF is set up as a trust, a person resident outside India (non-resident entity/individual including an NRI) cannot invest in such domestic VCF under the automatic route of the FDI scheme and would be allowed subject to approval of the FIPB. However, if a domestic VCF is set-up as an incorporated company under the Companies Act, 1956, then a person resident outside India (non-resident entity/individual including an NRI) can invest in such domestic VCF under the automatic route of FDI Scheme, subject to the pricing guidelines, reporting requirements, mode of payment, minimum capitalization norms, etc. 3.3.4 FDI in Trusts: FDI in Trusts other than VCF is not permitted. 3.3.5 FDI in other Entities²: FDI in resident entities other than those mentioned above is not permitted. 3.4 CONDITIONS ON ISSUE/TRANSFER OF SHARES 3.4.1 The capital instruments should be issued within 180 days from the date of receipt of the inward remittance or by debit to the NRE/FCNR (B) account of the non-resident investor. In case, the capital instruments are not issued within 180 days from the date of receipt of the inward remit....
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.... of sale or gift the shares or convertible debentures held by them to another NRI. (c) A person resident outside India can transfer any security to a person resident in India by way of gift. 20 20 (d) A person resident outside India can sell the shares and convertible debentures of an Indian company on a recognized Stock Exchange in India through a stock broker registered with stock exchange or a merchant banker registered with SEBI. (e) A person resident in India can transfer by way of sale, shares/convertible debentures (including transfer of subscriber's shares), of an Indian company in sectors other than financial services sectors (i.e. Banks, NBFC, Insurance, Asset Reconstruction Companies (ARCs), Credit Information Companies (CICs), infrastructure companies in the securities market viz. Stock Exchanges, Clearing Corporations, and Depositories, Commodity Exchanges, etc.) under private arrangement to a person resident outside India, subject to the guidelines given in Annex-2. (f) General permission is also available for transfer of shares/convertible debentures, by way of sale under private arrangement by a person resident outs....
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....nces of transfer of capital instruments from resident to non-residents by way of sale require prior approval of RBI: (a) Transfer of capital instruments of an Indian company engaged in financial services sector (i.e. Banks, NBFCs, Asset Reconstruction Companies (ARCs), Credit Information Companies (CICs), Insurance companies, infrastructure companies in the securities market such as Stock Exchanges, Clearing Corporations, and Depositories, Commodity Exchanges, etc.). (b) Transactions which attract the provisions of SEBI (Substantial Acquisition of Shares & Takeovers) Regulations, 1997. (c) The activity of the Indian company whose capital instruments are being transferred falls outside the automatic route and the approval of the Government has been obtained for the said transfer. (d) The transfer is to take place at a price which falls outside the pricing guidelines specified by the Reserve Bank from time to time. (e) Transfer of capital instruments where the non-resident acquirer proposes deferment of payment of the amount of consideration, prior approval of the Reserve Bank would be required, as hitherto. Further, in case approval is....
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....e for FDI or the company has obtained Government approval for foreign equity in the company; 23 (b) The foreign equity after conversion of ECB into equity is within the sectoral cap, if any; (c) Pricing of shares is as per the provision of para 3.4.2 above; (d) Compliance with the requirements prescribed under any other statute and regulation in force; and (e) The conversion facility is available for ECBs availed under the Automatic or Government Route and is applicable to ECBs, due for payment or not, as well as secured/unsecured loans availed from non-resident collaborators. (ii) General permission is also available for issue of shares/preference shares against lump sum technical know-how fee, royalty, subject to entry route, sectoral cap and pricing guidelines (as per the provision of para 3.4.2 above) and compliance with applicable tax laws. (iii) Issue of equity shares under the FDI policy is allowed under the Government route for the following categories: (I) import of capital goods/ machinery/ equipment (including second-hand machinery), subject to compliance with the following conditions: (a) Any import of capital goo....
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....company listed on a recognized stock exchange in India, at a price as determined by the company; (b) in the case of shares of a company not listed on a recognized stock exchange in India, at a price which is not less than the price at which the offer on right basis is made to resident shareholders. 3.5.2 Prior permission of RBI for Rights issue to erstwhile OCBs- OCBs have been de- recognised as a class of investors from September 16, 2003. Therefore companies desiring to issue rights share to such erstwhile OCBS will have to take specific prior permission from RBI. As such, entitlement of rights share is not automatically available to erstwhile OCBs. However bonus shares can be issued to erstwhile OCBs without the approval of RBI. 25 - 3.5.3 Additional allocation of rights share by residents to non-residents – Existing non- resident shareholders are allowed to apply for issue of additional shares/ fully, compulsorily and mandatorily convertible debentures/ fully, compulsorily and mandatorily convertible preference shares over and above their rights share entitlements. The investee company can allot the additional rights share ....
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....thereafter the details of issue of shares subsequent to the exercise of such stock options within 30 days from the date of issue of shares in Form FC-GPR. 3.5.6 Share Swap: In cases of investment by way of swap of shares, irrespective of the amount, valuation of the shares will have to be made by a Category I Merchant Banker registered with SEBI or an Investment Banker outside India registered with the appropriate regulatory authority in the host country. Approval of the Foreign Investment Promotion Board (FIPB) will also be a prerequisite for investment by swap of shares. 27 27 CHAPTER 4: CALCULATION, ENTRY ROUTE, CAPS, ENTRY CONDITIONS, ETC. OF INVESTMENT 4.1 CALCULATION OF TOTAL FOREIGN INVESTMENT I.E. DIRECT AND INDIRECT FOREIGN INVESTMENT IN INDIAN COMPANIES. 4.1.1 Investment in Indian companies can be made both by non-resident as well as resident Indian entities. Any non-resident investment in an Indian company is direct foreign investment. Investment by resident Indian entities could again comprise of both resident and non-resident investment. Thus, such an Indian company would have indirect foreign investment if the Indian ....
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.... indirect foreign investment is being calculated for Company X which has investment through an investing Company Y having foreign investment, the following would be the method of calculation: (A) where Company Y has foreign investment less than 50%- Company X would not be taken as having any indirect foreign investment through Company Y. (B) where Company Y has foreign investment of say 75% and: (I) invests 26% in Company X, the entire 26% investment by Company Y would be treated as indirect foreign investment in Company X; (II) Invests 80% in Company X, the indirect foreign investment in Company X would be taken as 80% (III) where Company X is a wholly owned subsidiary of Company Y (i.e. Company Y owns 100% shares of Company X), then only 75% would be treated as indirect foreign equity and the balance 25% would be treated as resident held equity. The indirect foreign equity in Company X would be computed in the ratio of 75: 25 in the total investment of Company Y in Company X. (iii)The total foreign investment would be the sum total of direct and indirect foreign investment. 29 29 (iv) The above methodology of calculation wo....
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....r the same management and ownership control. (B) For the purpose of this Clause, “Indian company†shall be a company which must have a resident Indian or a relative as defined under Section 6 of the Companies Act, 1956/HUF, either singly or in combination holding at least 51% of the shares. (C) Provided that, in case of a combination of all or any of the entities mentioned in Sub- Clauses (i) and (ii) of clause 4.1.3(v)(d)(1) above, each of the parties shall have entered into a legally binding agreement to act as a single unit in managing the matters of the applicant company. (e) If a declaration is made by persons as per section 187C of the Indian Companies Act about a beneficial interest being held by a non resident entity, then even though the investment may be made by a resident Indian citizen, the same shall be counted as foreign investment. 4.1.4 The above mentioned policy and the methodology would be applicable for determining the total foreign investment in all sectors, excepting in sectors where it is governed specifically under any statutes or rules there under. The above methodology of determining direct and ind....
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....passed on to a non-resident entity as a consequence of transfer of shares and/or fresh issue of shares to non-resident entities through amalgamation, merger/demerger, acquisition etc. or (iv) The ownership of an existing Indian company, currently owned or controlled by resident Indian citizens and Indian companies, which are owned or controlled by resident Indian citizens, will be/is being transferred/passed on to a non-resident entity as a consequence of transfer of shares and/or fresh issue of shares to non-resident entities through amalgamation, merger/demerger, acquisition etc. (v) It is clarified that these guidelines will not apply for sectors/activities where there are no foreign investment caps, that is, 100% foreign investment is permitted under the automatic route. 32 (vi) It is also clarified that Foreign investment shall include all types of foreign investments i.e. FDI, investment by FIIS, NRIs, ADRs, GDRs, Foreign Currency Convertible Bonds (FCCB) and fully, mandatorily & compulsorily convertible preference shares/debentures, regardless of whether the said investments have been made under Schedule 1, 2, 3 and 6 of FEMA (Transf....
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....ould have the same meaning as in Paragraph 4.1 4.6.3 Foreign investment into an Indian company engaged only in the activity of investing in the capital of other Indian company/ies (regardless of its ownership or control): 4.6.3.1 Foreign investment into an Indian company, engaged only in the activity of investing in the capital of other Indian company/ies, will require prior Government/FIPB approval, regardless of the amount or extent of foreign investment. Foreign investment into Non-Banking Finance Companies (NBFCs), carrying on activities approved for FDI, will be subject to the conditions specified in paragraph 5.2.18 of this Circular. Those companies, which are Core Investment Companies (CICs), will have to additionally follow RBI's Regulatory Framework for CICs. 4.6.3.2 For infusion of foreign investment into an Indian company which does not have any operations and also does not have any downstream investments, Government/FIPB approval would be required, regardless of the amount or extent of foreign investment. Further, as and when such a company commences business(s) or makes downstream investment, it will have to comply with the releva....
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....d it should be ensured that comments of the administrative ministries are placed before the Board either prior to/or in the meeting of the Board. 4.7.3 Proposals should be considered by the Board keeping in view the time frame of thirty (30) days for communicating Government decision. 4.7.4 In cases in which either the proposal is not cleared or further information is required in order to obviate delays presentation by applicant in the meeting of the FIPB should be resorted to. 4.7.5 While considering cases and making recommendations, FIPB should keep in mind the sectoral requirements and the sectoral policies vis-Ã -vis the proposal (s). 4.7.6 FIPB would consider each proposal in its totality. 4.7.7 The Board should examine the following while considering proposals submitted to it for consideration: (i) whether the items of activity involve industrial licence or not and if so the considerations for grant of industrial licence must be gone into; (ii) whether the proposal involves any export projection and if so the items of export and the projected destinations; (iii)Whether the proposal has any strategic or defence related consi....
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....ort of items which are either hazardous/banned or detrimental to environment (e.g. import of plastic scrap or recycled plastics). 4.7.10 No condition specific to the letter of approval issued to a non-resident investor would be changed or additional condition imposed subsequent to the issue of a letter of approval. This would not prohibit changes in general policies and, regulations applicable to the industrial sector. 37 37 4.8 CONSTITUTION OF FIPB : 4.8.1 FIPB comprises of the following Core Group of Secretaries to the Government of India: (i) Secretary to Government, Department of Economic Affairs, Ministry of Finance - Chairperson (ii) Secretary to Government, Department of Industrial Policy & Promotion, Ministry of Commerce & Industry (iii)Secretary to Government, Department of Commerce, Ministry of Commerce & Industry (iv) Secretary to Government, Economic Relations, Ministry of External Affairs (v) Secretary to Government, Ministry of Overseas Indian Affairs. 4.8.2 The Board would be able to co-opt other Secretaries to the Central Government and top officials of financial institutions, banks and professional e....
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....ctions to applicants are available at FIPB's website (http://finmin.nic.in/) (http://www.fipbindia.com). and 39 39 CHAPTER 5: POLICY ON ROUTE, CAPS AND ENTRY CONDITIONS: 5.1 PROHIBITION ON INVESTMENT IN INDIA. FDI is prohibited in the following activities/sectors: (a) Retail Trading (except single brand product retailing) (b) Lottery Business including Government /private lottery, online lotteries, etc. (c) Gambling and Betting including casinos etc. (d) Business of chit fund (e) Nidhi company (f) Trading in Transferable Development Rights (TDRs) (g) Real Estate Business or Construction of Farm Houses (h) Manufacturing of Cigars, cheroots, cigarillos and cigarettes, of tobacco or of tobacco substitutes (i) Activities / sectors not opened to private sector investment including Atomic Energy and Railway Transport (other than Mass Rapid Transport Systems). Besides foreign investment in any form, foreign technology collaboration in any form including licensing for franchise, trademark, brand name, management contract is also completely prohibited for Lottery Business and Gambling and Betting activities. 5.2 S....
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....for the categories of Floriculture, Horticulture, Cultivation of vegetables and Mushrooms is the practice of cultivation wherein rainfall, temperature, solar radiation, air humidity and culture medium are controlled artificially. Control in these parameters may be effected through protected cultivation under green houses, net houses, poly houses or any other improved infrastructure facilities where micro- climatic conditions are regulated anthropogenically. In case of Animal Husbandry, scope of the term 'under controlled conditions' includes - Rearing of animals under intensive farming systems with stall-feeding. Intensive farming system will require (ventilation, climate systems temperature/humidity management), health care and nutrition, herd registering/pedigree recording, use of machinery, waste management systems. • Poultry breeding farms and hatcheries where micro- climate is controlled through advanced technologies like incubators, ventilation systems etc. ■In the case of pisciculture and aquaculture, 'under controlled conditions' includes - Tea Plantation • Aquariums Hatcheries ....
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....d minerals which have been classified as “prescribed substances" under the Atomic Energy Act, 1962. Under the Industrial Policy Statement 1991, mining and production of minerals classified as “prescribed substances†and specified in the Schedule to the Atomic Energy (Control of Production and Use) Order, 1953 were included in the list of industries reserved for the public sector. Vide Resolution No. 8/1(1)/97-PSU/1422 dated 6 th October 1998 issued by the Department of Atomic Energy laying down the policy for exploitation of beach sand minerals, private participation including Foreign Direct Investment (FDI), was permitted in mining and production of Titanium ores (Ilmenite, Rutile and Leucoxene) and Zirconium minerals (Zircon). Vide Notification No. S.O.61(E) dated 18.1.2006, the Department of Atomic Energy re-notified the list of “prescribed substances†under the Atomic Energy Act 1962. Titanium bearing ores and concentrates (Ilmenite, Rutile and Leucoxene) and Zirconium, its alloys and compounds and minerals/concentrates including Zircon, were removed from the list of "prescribed substances". (i) FD....
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....port obligation would be applicable from the date of commencement of commercial production and in accordance with the 45 Sl.No. Sector/Activity % of FDI Entry Route Cap/Equity 5.2.5 provisions of section 11 of the Industries (Development & Regulation) Act 1951. DEFENCE 5.2.5.1 Defence Industry subject to Industrial 26% license under the Industries Government 1951³ 5.2.5.2 (Development & Regulation) Act 3 Other conditions: (i) Licence applications will be considered and licences given by the Department of Industrial Policy & Promotion, Ministry of Commerce & Industry, in consultation with Ministry of Defence. (ii) The applicant should be an Indian company / partnership firm. (iii)The management of the applicant company / partnership should be in Indian hands with majority representation on the Board as well as the Chief Executives of the company / partnership firm being resident Indians. (iv) Full particulars of the Directors and the Chief Executives should be furnished along with the applications. (v) The Government reserves the right to verify the antecedents of the foreign collabora....
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....rance agency under appropriate confidentiality clause. The nominated quality assurance agency would inspect the finished product and would conduct surveillance and audit of the Quality 47 Sl.No. Sector/Activity 5.2.6 % of FDI Entry Route Cap/Equity Assurance Procedures of the licensee. Self-certification would be permitted by the Ministry of Defence on case to case basis, which may involve either individual items, or group of items manufactured by the licensee. Such permission would be for a fixed period and subject to renewals. (xiii) Purchase preference and price preference may be given to the Public Sector organizations as per guidelines of the Department of Public Enterprises. (xiv) Arms and ammunition produced by the private manufacturers will be primarily sold to the Ministry of Defence. These items may also be sold to other Government entities under the control of the Ministry of Home Affairs and State Governments with the prior approval of the Ministry of Defence. No such item should be sold within the country to any other person or entity. The export of manufactured items would be subject to policy and....
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....for the landing or departure of aircraft, and includes all buildings, sheds, vessels, piers and other structures thereon or pertaining thereto; (iii)"Air transport service" means a service for the transport by air of persons, mails or any other thing, animate or inanimate, for any kind of remuneration whatsoever, whether such service consists of a single flight or series of flights; (iv)"Air Transport Undertaking" means an undertaking whose business includes the carriage by air of passengers or cargo for hire or reward; (v) "Aircraft component" means any part, the soundness and correct functioning of which, when fitted to an aircraft, is essential to the continued airworthiness or safety of the aircraft and includes any item of equipment; (vi)"Helicopter" means a heavier-than-air aircraft supported in flight by the reactions of the air on one or more power driven rotors on substantially vertical axis; (vii) "Scheduled air transport service", means an air transport service undertaken between the same two or more places and operated according to a published time table or with flights so regular or frequent that they constitute ....
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....pter services/seaplane 100% services requiring DGCA approval Other services under Civil Aviation sector 74% Automatic (1) Ground Handling Services subject to sectoral regulations and security clearance 74% FDI Automatic up (100% for NRIs) to 49% 5.2.8 5.2.8.1 (2) Maintenance and Repair 100% organizations; flying training institutes; and technical training institutions Asset Reconstruction Companies Government route beyond 49% and up to 74% Automatic ‘Asset Reconstruction Company' (ARC) means a company registered with the Reserve Bank of India under Section 3 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act). 5.2.8.2 FDI limit 5.2.8.3 Other conditions: 49% of paid-up Government capital of ARC (i) Persons resident outside India, other than Foreign Institutional Investors (FIIs), can invest in the capital of Asset Reconstruction Companies (ARCs) registered with Reserve Bank only under the Government Route. Such investments have to be strictly in the nature of FDI. Investments by FIIs are n....
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....ivity % of FDI Entry Route Cap/Equity per cent of the total paid-up capital both on repatriation and non- repatriation basis and aggregate limit cannot exceed 10 per cent of the total paid-up capital both on repatriation and non-repatriation basis. However, NRI holding can be allowed up to 24 per cent of the total paid-up capital both on repatriation and non-repatriation basis provided the banking company passes a special resolution to that effect in the General Body. (c) Applications for foreign direct investment (FDI route) in private banks having joint venture/subsidiary in insurance sector may be addressed to the Reserve Bank of India (RBI) for consideration in consultation with the Insurance Regulatory and Development Authority (IRDA) in order to ensure that the 26 per cent limit of foreign shareholding applicable for the insurance sector is not being breached. (d) Transfer of shares under FDI from residents to non-residents will continue to require approval of RBI and Government as per para 4.2.2 above as applicable. (e) The policies and procedures prescribed from time to time by RBI and other institutions such....
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....Companies (Acquisition & Transfer of Undertakings) Acts 1970/80. This ceiling (20%) is also Portfolio Investment) and Government 55 55 Sl.No. 5.2.11 5.2.11.1 5.2.11.2 5.2.11.3 5.2.11.4 5.2.11.4.1 Sector/Activity applicable to the State Bank of India and its associate Banks. Broadcasting Terrestrial Broadcasting FM (FM Radio) subject to such terms and conditions as specified from time to time by Ministry of Information and Broadcasting for grant of permission for setting up of FM Radio Stations Cable Network subject to Cable Television Network Rules, 1994 and other conditions as specified from time to time by Ministry of Information and Broadcasting Direct-to-Home subject to such guidelines/terms and conditions as specified from time to time by Ministry of Information and Broadcasting % of FDI Entry Route Cap/Equity 20% (FDI, NRI & Government PIO investments and portfolio investment) 49% (FDI, NRI & Government PIO investments and portfolio investment) 49% (FDI, NRI & Government PIO investments and portfolio investment) Within this limi....
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...., modern management skills and latest technology, it was decided to allow foreign investment in Commodity Exchanges. 2 For the purposes of this chapter, (i) "Commodity Exchange" is a recognized association under the provisions of the Forward Contracts (Regulation) Act, 1952, as amended from time to time, to provide exchange platform for trading in forward contracts in commodities. (ii) “recognized association†means an association to which recognition for the time being has been granted by the Central Government under Section 6 of the Forward Contracts (Regulation) Act, 1952 57 52 Sl.No. Sector/Activity 5.2.12.2 % of FDI Entry Route Cap/Equity (iii) “Association†means any body of individuals, whether incorporated or not, constituted for the purposes of regulating and controlling the business of the sale or purchase of any goods and commodity derivative. (iv) "Forward contract†means a contract for the delivery of goods and which is not a ready delivery contract. (v) "Commodity derivative" means- • a contract for delivery of goods, which is not a ready delivery contract....
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....er is later. However, the investor may be permitted to exit earlier with prior approval of the Government through the FIPB. (4) At least 50% of the project must be developed within a period of five years from the date of obtaining all statutory clearances. The investor/investee company would not be permitted to sell undeveloped plots. For the purpose of these guidelines, “undeveloped plots†will mean where roads, water supply, street lighting, drainage, sewerage, and other conveniences, as applicable 59 509 Sl.No. Sector/Activity % of FDI Entry Route Cap/Equity under prescribed regulations, have not been made available. It will be necessary that the investor provides this infrastructure and obtains the completion certificate from the concerned local body/service agency before he would be allowed to dispose of serviced housing plots. (5) The project shall conform to the norms and standards, including land use requirements and provision of community amenities and common facilities, as laid down in the applicable building control regulations, bye-laws, rules, and other regulations of the State Government/Mun....
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....al Parks Automatic (i) “Industrial Park†is a project in which quality infrastructure in the form of plots of developed land or built up space or a combination with common facilities, is developed and made available to all the allottee units for the purposes of industrial activity. (ii) “Infrastructure" refers to facilities required for functioning of units 61 Sl.No. Sector/Activity % of FDI Entry Route Cap/Equity located in the Industrial Park and includes roads (including approach roads), water supply and sewerage, common effluent treatment facility, telecom network, generation and distribution of power, air conditioning. (iii)"Common Facilities†refer to the facilities available for all the units located in the industrial park, and include facilities of power, roads (including approach roads), water supply and sewerage, common effluent treatment, common testing, telecom services, air conditioning, common facility buildings, industrial canteens, convention/conference halls, parking, travel desks, security service, first aid center, ambulance and other safety services, training faciliti....
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....orations, in compliance with SEBI Regulations Other Conditions: 49% (FDI & FII) Government [FDI limit of 26 per cent and an FII limit of 23 per cent of the paid-up capital] FII can invest only through purchases in the secondary market Non-Banking Finance Companies (NBFC) 5.2.18.1 Foreign investment in NBFC is 100% allowed under the automatic route in Automatic 69 63 Sl.No. Sector/Activity only the following activities: (i) Merchant Banking (ii) Under Writing (iii) Portfolio Management Services (iv) Investment Advisory Services (v) Financial Consultancy (vi) Stock Broking (vii) Asset Management (viii) Venture Capital (ix) Custodian Services (x) Factoring (xi) Credit Rating Agencies (xii) Leasing & Finance (xiii) Housing Finance (xiv) Forex Broking (xv) Credit Card Business (xvi) Money Changing Business (xvii) Micro Credit (xviii) Rural Credit % of FDI Entry Route Cap/Equity 5.2.18.2 Other Conditions: (1) Investment would be subject to the following minimum capitalisation norms: (i) US $0.5 million for foreign capital upto 51% to be brought upfront ....
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....s, petroleum product pipelines, natural gas/pipelines, LNG Regasification infrastructure, market study and formulation and Petroleum refining in the private sector, subject to the existing sectoral policy and regulatory framework in the oil marketing sector and the policy of the Government on private participation in exploration of oil and the discovered fields of national oil companies Petroleum refining by the Public 49% Sector Undertakings (PSU), without any disinvestment or dilution of domestic equity in the existing PSUs. Print Media Publishing of Newspaper and 26% (FDI periodicals dealing with news and investment current affairs Publication of Indian editions of foreign magazines dealing with news and current affairs NRIS/PIOS/FII) 26% (FDI investment NRIS/PIOS/FII) Automatic Government and Government by and Government by 66 66 Sl.No. Sector/Activity % of FDI Entry Route Cap/Equity 5.2.20.2.1 Other Conditions: (i) 'Magazine', for the purpose of these guidelines, will be defined as a periodical publication, brought out on non-daily basis, containing ....
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....route Satellites Establishment and operation 5.2.22 5.2.22.1 Satellites 5.2.23 - Establishment and 74% operation, subject to the sectoral guidelines of Department of Space/ISRO Telecommunication Government Investment caps and other conditions for specified services are given below. However, licensing and security requirements notified by the Department of Telecommunications will need to be complied with for all services. 5.2.23.1 (i) Telecom services 74% Automatic up to 49% Government 5.2.23.1.1 Other conditions: (1) General Conditions: route beyond 49% and up to 74% (i) This is applicable in case of Basic, Cellular, Unified Access Services, National International Long Distance, V-Sat, Public Mobile Radio Trunked Services (PMRTS), Global Mobile Personal Communications 68 88 Sl.No. Sector/Activity % of FDI Entry Route Cap/Equity Services (GMPCS) and other value added Services. (ii) Both direct and indirect foreign investment in the licensee company shall be counted for the purpose of FDI ceiling. Foreign Investment shall include investment by Foreign Institution....
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....all be required periodically on yearly basis. In case something adverse is found during the security vetting, the direction of MHA shall be binding on the licensee. (viii) The Company shall not transfer the following to any person/place outside India:- (a) Any accounting information relating to subscriber (except for international roaming/billing) (Note: it does not restrict a statutorily required disclosure of financial nature) ; and (b) User information (except pertaining to foreign subscribers using Indian Operator's network while roaming). (ix) The Company must provide traceable identity of their subscribers. However, in case of providing service to roaming subscriber of foreign 70 70 Sl.No. Sector/Activity % of FDI Entry Route Cap/Equity Companies, the Indian Company shall endeavour to obtain traceable identity of roaming subscribers from the foreign company as a part of its roaming agreement. (x) On request of the licensor or any other agency authorised by the licensor, the telecom service provider should be able to provide the geographical location of any subscriber (BTS location) at a given point ....
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....roviders (OSPs), providing services like Call Centres, Business Process Outsourcing (BPO), tele-marketing, tele- education, etc, and are registered with DoT as OSP. Such OSPS operate the service using the telecom infrastructure provided by licensed telecom service providers and 100% FDI is permitted for OSPs. As the security conditions are applicable to all licensed telecom service providers, the security conditions mentioned above shall not be separately enforced on OSPs. (3) The above General Conditions and Security Conditions shall also be applicable to the companies operating telecom service(s) with the FDI cap of 72 Sl.No. 5.2.23.2 Sector/Activity % of FDI Entry Route Cap/Equity 49%. (4) All the telecom service providers shall submit a compliance report on the aforesaid conditions to the licensor on 1st day of July and January on six monthly basis. (a) ISP with gateways (b) ISP's not providing gateways i.e without gate-ways (both for satellite and marine cables) Note: The new guidelines of August 24, 2007 Department of Telecommunications provide for new ISP licenses with FDI upto 74%. (c)....
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....rtificate/registration under Shops and Establishment Act, issued by a Government Authority/ Government Body Local Self-Government Authority, reflecting that the entity/person holding the license/ registration certificate/ membership certificate, as the case may be, is itself/ himself/herself engaged in a business involving commercial activity; or (III) Entities holding permits/license etc. for undertaking retail trade (like tehbazari and similar license for hawkers) from Government Authorities/Local Self Government Bodies; or 74 174 Sl.No. Sector/Activity (c) (d) (e) (f) % of FDI Entry Route Cap/Equity (IV) Institutions having certificate of incorporation or registration as a society or registration as public trust for their self consumption. Note: An Entity to whom WT is made, may fulfill any one of the 4 conditions. Full records indicating all the details of such sales like name of entity, kind of entity, registration/license/permit etc. number, amount of sale etc. should be maintained on a day to day basis. WT of goods would be permitted among companies of the same group. However, such WT to g....
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....ny addition to the product/ product categories to be sold under ‘Single Brand' would require a fresh approval of the Government. (4) Applications would be processed in the Department of Industrial Policy & Promotion, to determine whether the products proposed to be sold satisfy the notified guidelines, before being considered by the FIPB for Government approval. Courier services for carrying packages, parcels and other items which do not come within the ambit of the Indian Post Office Act, 1898. 4 DIPP had recently released a Discussion paper calling for views/suggestions from the stakeholders to review the extant policy on FDI in Multi-brand Retail 76 16 Sl.No. Sector/Activity % of FDI Entry Route 5.2.25.1 Cap/Equity 100% FDI is allowed under the Government route. 5.2.25.2 Note: This will be subject to existing Law i.e Indian Post Office Act 1898 and exclusion of activity relating to the distribution of letters. Minimum capitalization includes share premium received alongwith the face value of the share, only when it is received by the company upon issue of the shares to the non-resident investor. ....
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....ign Exchange Management (Current Account Transactions) Rules, 2000, as amended from time to time. 6.1.3 Repatriation of Interest: Interest on fully, mandatorily & compulsorily convertible debentures is also freely repatriable without any restrictions (net of applicable taxes). The repatriation is governed by the provisions of the Foreign Exchange Management (Current Account Transactions) Rules, 2000, as amended from time to time. 6.2. REPORTING OF FDI 6.2.1 Reporting of Inflow (i) An Indian company receiving investment from outside India for issuing shares / convertible debentures / preference shares under the FDI Scheme, should report the details of the amount of consideration to the Regional Office concerned of the Reserve Bank not later than 30 days from the date of receipt in the Advance Reporting Form enclosed as Annex-5. (ii) Indian companies are required to report the details of the receipt of the amount of consideration for issue of shares / convertible debentures, through an AD Category - I bank, together with a copy/ies of the FIRC/s evidencing the receipt of the remittance along with the KYC report (enclosed as Annex-6) ....
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....ubmitted by 31st July will pertain to all the investments made in the previous years up to March 31). The details of the investments to be reported would include all foreign investments made into the company which is outstanding as on the balance sheet date. The details of overseas investments in the company both under direct / portfolio investment may be separately indicated. (e) Issue of bonus/rights shares or stock options to persons resident outside India directly or on amalgamation / merger/demerger with an existing Indian company, as well as issue of shares on conversion of ECB / royalty / lumpsum technical know-how fee / import of capital goods by units in SEZs, has to be reported in Form FC-GPR. 80 80 6.2.3 Reporting of transfer of shares Reporting of transfer of shares between residents and non-residents and vice-versa is to be done in Form FC-TRS (Annex-7). The Form FC-TRS should be submitted to the AD Category – I bank, within 60 days from the date of receipt of the amount of consideration. The onus of submission of the Form FC-TRS within the given timeframe would be on the transferor / transferee, resident in Ind....
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....ntravention of FEMA. 6.3.1 Penalties (i) If a person violates/contravenes any FDI Regulations, by way of breach/non- adherence/non-compliance/contravention of any rule, regulation, notification, press note, press release, circular, direction or order issued in exercise of the powers under FEMA or contravenes any conditions subject to which an authorization is issued by the Government of India/FIPB/Reserve Bank of India, he shall, upon adjudication, be liable to a penalty up to thrice the sum involved in such contraventions where such amount is quantifiable, or up to two lakh Rupees where the amount is not quantifiable, and where such contraventions is a continuing one, further penalty which may extend to five thousand Rupees for every day after the first day during which the contraventions continues. (ii) Where a person committing a contravention of any provisions of this Act or of any rule, direction or order made there under is a company (company means any body corporate and includes a firm or other association of individuals as defined in the Companies Act), every person who, at the time the contravention was committed, was in char....
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....n opportunity of being heard to all the concerns as expeditiously and not later than 180 days from the date of application made to the Compounding Authority. Compounding Authority shall issue order specifying the provisions of the Act or of the rules, directions, requisitions or orders made there under in respect of which contravention has taken place along with details of the alleged contraventions. 83 Annex - 1-A FC-GPR (To be filed by the company through its Authorised Dealer Category - I bank with the Regional Office of the RBI under whose jurisdiction the Registered Office of the company making the declaration is situated as and when shares/convertible debentures are issued to the foreign investor, along with the documents mentioned in item No. 4 of the undertaking enclosed to this Form) Permanent Account Number (PAN) of the investee company given by the Income Tax Department Date of issue of shares / convertible debentures Particulars No. 1. Name Address of the Registered Office (In Block Letters) State Registration No. given by Registrar of Companies Whether existing company or new company (stri....
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....or against import of capital goods by units in SEZ, a Chartered Accountant's Certificate certifying the amount outstanding on the date of conversion (c) Break up of premium Control Premium Non competition fee Others@ Total @ please specify the nature (d) Total inflow (in Rupees) on account of issue of shares convertible debentures to non-residents (including premium, if any) vide Amount 98 86 (e) (i) Remittance through AD: (ii) Debit to NRE/FCNR A/c with Bank (iii) Others (please specify) Date of reporting of (i) and (ii) above to RBI under Para 9 (1) A of Schedule I to Notification No. FEMA 20 /2000-RB dated May 3, 2000, as amended from time to time. Disclosure of fair value of shares issued** We are a listed company and the market value of a share as on date of the issue is* We are an un-listed company and the fair value of a share is* ** before issue of shares 5. Post issue pattern of shareholding *(Please indicate as applicable) Investor category a) 01 Non-Resident Individuals 02 Companies 03 FIIS 04 FVCIS 05 Foreign Trusts 06 Private Equity ....
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....y, duly approved by a court in India. OR Shares are issued under ESOP and the conditions regarding this issue have been satisfied 88 88 3. Shares have been issued in terms of SIA /FIPB approval No. dated 4. We enclose the following documents in compliance with Paragraph 9 (1) (B) of Schedule 1 to Notification No. FEMA 20/2000-RB dated May 3, 2000: (i) (ii) A certificate from our Company Secretary certifying that (a) (b) (c) (d) all the requirements of the Companies Act, 1956 have been complied with; terms and conditions of the Government approval, if any, have been complied with; the company is eligible to issue shares under these Regulations; and the company has all original certificates issued by authorised dealers in India evidencing receipt of amount of consideration in accordance with paragraph 8 of Schedule 1 to Notification No. FEMA 20/2000-RB dated May 3, 2000. A certificate from Statutory Auditors / SEBI registered Category I Merchant Banker / Chartered Accountant indicating the manner of arriving at the price of the shares issued to the persons resident outside India. 5. Unique Identification....
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....mpany Name : Old Activity: New Company Name Effective Date New Activity Nature of Business: Please tick (✓ ) the appropriate group of activity to which your principal line of business pertains and also mention, if possible, the NIC code in the bracket. Industry Revenue Industry Revenue Industry (%) (%) Revenue (%) Industry Revenue (%) 1. Power 2. Electrical & 3. Non-financial 4. Financial Services 91 ( ) Electronics services ( 5.Telecom ) ( 6. Hotels & Tourism ( 7. Metallurgical Industry & Mining 11. Chemicals (other than fertilizers) ) 9. Transportation 10. Petroleum & Natural Gas ) 13. Software and ITES/BPO 14. Pharmaceutical 15. Other ( ) ( ) 8. Food Processing Industry ( ) 12. Construction ) 8. Whether your company is listed in India [please tick (✓)]? 9. Whether your company has any Foreign Collaboration? If yes, please indicate whether it is (please tick the appropriate one) (a) Technical collaboration (b) Financial collaboration (foreign equity participation) Block 1A: Total Pa....
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....iabilities to Direct Investor 3.0 Disinvestments in India during the year Note: (i) if investor is a company, then country the country of incorporation; (ii) Please use different sheet using same format to report different non-resident company/individual. Block 2B: Foreign Direct Investment in India (Less than 10% Equity Holding) [Please furnish here the outstanding investments made under the FDI Scheme in India by Non-resident Direct investors, who were individually holding less than 10 per cent_ordinary/ equity shares of your company on the reporting date] Name of the non-resident Type of Capital Country of non-resident investor Equity Amount in lakh as at the end of holding (%) March December March Previous FY Current FY Current FY Company/ Individual 1.0 Equity Capital (1.0 = 1.2-1.1) 1.1 Claims on Direct Investor 1.2 Liabilities to Direct Investor 2.0 Other Capital(2.0 = 2.2-2.1) 2.1 Claims on Direct Investor 2.2 Liabilities to Direct Investor 3.0 Disinvestments in India during the year Note: (i) if investor is a company, then country is the country of incorporation; (ii) Please use differen....
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....vious FY March Current FY 6.0 Other Liabilities (6.0 = 6.1+6.2) 6.1 Short Term (Up to 1 yr.) 6.2 Long Term Note: (i) Data pertaining to each type of investment are to be reported consolidating the information country wise. If more countries are involved to report the data for the particular type(s) of investment, it should be reported in the same format using additional sheets separately for each country. (ii) At item 5.0, loan should include the ECB loan other than those taken from non-resident parent company. ECB loan taken from parent company abroad should be shown under Other Capital of Block 2A. Section –III FOREIGN ASSETS 1. Please use the exchange rate as at end-March/end-December (as applicable) of reporting year while reporting the foreign assets in lakh. 95 95 2. In case, the overseas company is listed, equity should be valued using share price on closing date of reference period, while in case of unlisted company, use Own Fund of Book Value (OFBV) method for valuation of equity (see the attached guidelines for details) Block 4: Direct Investment Abroad under Overseas Direct Investment Scheme Block 4A: Dir....
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....se reported in Block 4A & 4B). 2. In case overseas companies are listed, equity should be valued using share price on closing date of reference period, while in case of unlisted companies, use Own Fund of Book Value Method (OFBV) (see the attached guidelines for details) Portfolio Investment 1.0 Equity Securities 2.0 Debt Securities (2.0=2.1+2.2) 2.1 Bonds and Notes (original maturity more than 1year) 2.2 Money Market Instruments (original maturity up to 1year) 3.0 Disinvestments Abroad during the year Country of non-resident Amount in lakh as at the end of March Previous enterprise FY December Current FY March Current FY Note: Data pertaining to each type of investment are to be reported consolidating the information country wise. If particular type(s) of investment spreads over more than one country, it should be reported in the above format using separate additional sheet for each country. Block 5B: Financial Derivatives (with non-resident entities only) Please furnish here the outstanding claims on non-residents on account of financial derivatives contract entered into with Non-residents. Financ....
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....ingent foreign liabilities of your company] # Description of Contingent Liability Country Currency" Amount in Foreign Currency as at the end of (in actual) March Previous FY March Current FY (1) (2) (3) (4) (5) Note: # Currency of denomination of the contingent foreign liability should be mentioned in Col. 3. Refer to the details on Contingent liabilities given in Annex. 88 98 Block 8: Employee Information of reporting Indian company No. of Employees on Payroll As at the end-March of Previous FY Current FY BLOCK 9: Name(s) & Address (es) of your subsidiary in India Your Equity holding in Sr. Nos. subsidiary Name of Subsidiary in India* % Address Retained profit/ loss of your subsidiary in India during the current FY (Amount in lakh) Certificate We hereby certify that all the facts and figures furnished in this schedule reflect the accurate position of the company and reported after understanding all the items of all the blocks of the schedule. Place: Date: Signature and Name of the Authorised person 99 66 Concepts & Definitions to be used whil....
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....ent or more equity/ ordinary shares in the reporting Indian company, then it should reported under Block 2A (item 1.2, liabilities to direct investment). However, if the non-resident entity holds less than 10 per cent 100 of the equity capital of reporting Indian company, then it should be reported under Block 2B (item 1.2, liabilities to direct investment). In both the cases, the investing non-resident entity is called as the Direct Investor (DI) while the reporting Indian company is called as Direct Investment Enterprise (DIE). If the reporting Indian company also holds the equity shares in its DI company abroad and if its share is less than 10 per cent of equity capital of DI company, then it is called as reverse investment and same should be reported under item 1.1 (claim on direct investor) of the respective block i.e. Block 2A or 2B. (b) Foreign Direct Investment abroad by Indian companies (Block 4A and 4B) If the reporting Indian company invest in equity shares of non-resident company, under the Overseas Direct Investment scheme in India, i.e. investment in Joint venture or Wholly owned subsidiaries abroad, then it should be repor....
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.... ordinary shares, stocks, participating preference shares, depository receipts (ADRs/GDRs) denoting ownership of 101 equity securities issued to non-residents, shares/units in mutual funds & investment trusts, equity securities that are sold under repurchase agreement, equity securities that are sold under securities lending arrangement. (iii) Debt Securities (Block 3A & 5A, Item 2.0) These include bonds and notes, money market instruments. (iv) Bonds and Notes (Block 3A & 5A, Item 2.1) This category includes debt securities with original contractual maturities of more than one year (long-term). It includes the long-term securities such as Debentures, Non-participating preference shares, Convertible bonds, Negotiable certificates of deposit, Perpetual bonds, Collateralized mortgage obligations, Dual currency, Zero coupon and other Deep discounted bonds, Floating rate bonds and Index-linked bonds. (v) Money Market Instruments (Block 3A & 5A, Item 2.2) These short-term instruments include treasury bills, commercial paper, banker's acceptances, short-term negotiable certificates of deposit and short-term notes issued under note issuance ....
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.... block 4A or 4B. These outstanding loans should be reported under the loan item of Block 3C or 5C. 102 (iii) Other Liabilities and Assets (Block 3C & 5C, Item 6.0) These are the residual items that include all external financial liabilities and assets not recorded elsewhere in the liabilities/assets. These are miscellaneous accounts receivable and payable such as accounts relating to interest payments in arrears, loan payments in arrears, wages and salaries outstanding, prepayments of insurance premiums, taxes outstanding & the like. (iv) Long-term and Short-term Investment (Block 3C & 5C) Long-term investment is defined as investment with an original contractual maturity of more than one year. Short-term investment includes currency, investment payable on demand or with an original contractual maturity of one year or less. E. Disinvestments in India and Abroad (Item 3.0 in Block 2A, 2B, 3A, 4A, 4B & 5A) Any disinvestments made by non-resident direct investor of the reporting Indian company during the year should be reported in Block 2A and Block 2B and portfolio disinvestments in Block 3A. Likewise, any disinvestment made by the reporti....
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....ident in India to a person resident outside India. ii. 2.2 Transfer of shares, by way of sale under private arrangement by a person resident outside India to a person resident in India. Transfer by Resident to Non-resident (i.e. to incorporated non-resident entity other than erstwhile OCB, foreign national, NRI, FII) Price of shares transferred by way of sale by resident to a non-resident where the shares of an Indian company are: (a) listed on a recognized stock exchange in India,shall not be less than the price at which the preferential allotment of shares can be made under the SEBI guidelines, as applicable, provided the same is determined for such duration as specified therein, preceding the relevant date, which shall be the date of purchase or sale of shares, (b) not listed on a recognized stock exchange in India,shall not be less than the fair value to be determined by a SEBI registered Category I Merchant Banker or a Chartered Accountant as per the discounted free cash flow method. The price per share arrived at should be certified by a SEBI registered Category I Merchant Banker or a Chartered Accountant. 2.3 Transf....