SCHEDULE-07 - Investment by a Foreign Venture Capital Investor (FVCI) - Foreign Exchange Management (Non-debt Instruments) Rules, 2019

SCHEDULE VII (See rule 16) Investment by a Foreign Venture Capital Investor (FVCI) (1) Subject to the terms and conditions as may be laid down by the Central Government, a Foreign Venture Capital Investor (FVCI) may purchase,- - (i) securities, issued by an Indian company engaged in any sector mentioned in paragraph (4) of this Schedule and whose securities are not listed on a recognised stock exchange at the time of issue of the said securities; (ii) units of a Venture Capital Fund (VCF) or of a Category I Alternative Investment Fund (Cat-I AIF) or units of a scheme or of a fund set up by a VCF or by a Cat-I AIF. 1 [ (iii) equity or equity linked instrument or debt instrument issued by an Indian startup company irrespective of the sector in which the startup company is engaged: Provided that if the investment is in equity instruments, then the sectoral caps, entry routes and attendant conditions shall apply. ] (2) A FVCI may purchase the securities or instruments mentioned above either from the issuer of these securities/ instruments or from any person holding these securities or instruments. The FVCI may invest in securities on a recognised stock exchange subject to the provisions of the Securities and Exchange Board of India (FVCI) Regulations, 2000. (3) The FVCI may acquire, by purchase or otherwise, from, or transfer, by sale or otherwise, to, any person resident in or outside India, any security or instrument it is allowed to invest in, at a price that is mutually acceptable to the buyer and the seller/ issuer. The FVCI may also receive the proceeds of the liquidation of VCFs or of Cat-I AIFs or of schemes or funds set up by the VCFs or Cat-I AIFs. (4) The mode of payment and other attendant conditions for remittance of sale or maturity proceeds shall be specified by the Reserve Bank of India (5) List of sectors in which a Foreign Venture Capital Investor is allowed to invest is as follows :- (a) biotechnology; (b) IT related to hardware and software development; (c) nanotechnology; (d) seed research and development; (e) research and development of new chemical entities in pharmaceutical sector. (f) dairy industry; (g) poultry industry; (h) production of bio-fuels; (i) hotel-cum-convention centres with seating capacity of more than three thousand; (j) Infrastructure sector. The term Infrastructure Sector has the same meaning as given in the Harmonised Master List of Infrastructure sub-sectors approved by Government of India vide notification F. No. 13/06/2009- INF, dated the March 27, 2012 as amended or updated. **************** NOTES:- 1. Substituted vide Notification No. S.O. 3492(E) dated 16-08-2024 before it was read as, (iii) equity or equity linked instrument or debt instrument issued by an Indian start-up irrespective of the sector in which the start-up is engaged. The definition of start-up shall be as per Department for Promotion of Industry and Internal Trade s Notification No. G.S.R. 364(E), dated the 11th April, 2018 : Provided that if the investment is in equity instruments, then the sectoral caps, entry routes and attendant conditions shall apply.