Regulation 7 - Acquisition or transfer by way of deferred payment - Foreign Exchange Management (Overseas Investment) Regulations, 2022

7. Acquisition or transfer by way of deferred payment . (1) Where a person resident in India acquires equity capital by way of subscription to an issue or by way of purchase from a person resident outside India or where a person resident outside India acquires equity capital by way of purchase from a person resident in India, and where such equity capital is reckoned as ODI, the payment of amount of consideration for the equity capital acquired may be deferred for such definite period from the date of the agreement as provided in such agreement subject to the following terms and conditions, namely: (i) the foreign securities equivalent to the amount of total consideration shall be transferred or issued, as the case may be, upfront by the seller to the buyer; (ii) the full consideration finally paid shall be compliant with the applicable pricing guidelines: Provided that the deferred part of the consideration in case of acquisition of equity capital of a foreign entity by a person resident in India shall be treated as non-fund based commitment. (2) The buyer may be indemnified by the seller up to such amount and be subject to such terms and conditions as may be mutually agreed upon and laid down in the agreement: Provided that such agreement is in compliance with the provisions of the Act and the rules and regulations made thereunder.