Review of the FDI Policy on downstream investments made by Non-Resident Indians (NRIs) - FEMA - Press Note No. 1(2021 Series)

Government of India Ministry of Commerce Industry Department for Promotion of Industry Internal Trade (FDI Policy Section) Press Note No. 1(2021 Series) Subject: Review of the FDI Policy on downstream investments made by Non-Resident Indians (NRIs). The Government of India has reviewed the extant FDI policy in relation to investments made by an Indian company owned and controlled by Non-Resident Indians (NRIs) on a non-repatriation basis and in order to provide clarity on downstream investments made following addition in the consolidated FDI Policy Circular of 2020 (FDI Policy) effective from 15.10.2020 and as amended from time to time. 2. Insertion of clause (c) under Para 1.2 (ii) in Annexure 4 Investments by NRI(s) on a non-repatriation basis as stipulated under Schedule IV of Foreign Exchange Management (Non-Debt Instruments) Rules 2019 are deemed to be domestic investments at par with the investments made by residents. Accordingly, an investment made by an Indian entity which is owned and controlled by NRI(s) on a non-repatriation basis shall not be considered for calculation of indirect foreign investment. 3. The above decision will take effect from the date of FEMA notification (Manmeet Kaur Nanda) Joint Secretary to the Government of India DPIIT File No. 5(13)/2020-FDI Policy dated 19/03/2021