Investment in India - FDI policy overview

India has one of the most transparent and liberal Foreign Direct Investment (FDI) regimes among emerging and developing economies. Differential treatment is limited to a few entry rules, predominantly in some Services sectors, spelling out the proportion of equity that the foreign investor can hold in an India-registered company or business-termed "sector caps". Foreign corporate and individual investment in India, termed collectively as Foreign Direct Investment (FDI) when it relates to control or ownership of a company in India, takes one of two routes:

Automatic route or Automatic Approval:
This requires no prior approval for FDI. Post-facto filing of data relating to the investment made with the Reserve Bank of India (RBI) are for record and data purposes. This route is available to all sectors or activities that do not have a "sector cap" i.e. where 100% foreign ownership is permitted, or for investments that are within a sector cap (e.g. less than or equal to 26% share of an Insurance company) and where the Automatic route is allowed.

FIPB Approval - the Foreign Investment Promotion Board (FIPB) approves investment proposals: