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TMI BlogPermission for Direct Investment in certain casesX X X X Extracts X X X X X X X X Extracts X X X X ..... eely convertible currencies or equivalent Indian Rupees, in case of Nepal investment made only in Indian Rupees; (b) Capitalization of export proceeds and other dues and entitlements as mentioned in Regulation 11; (c) Hundred per cent of the value of guarantees issued by the Indian party to on or behalf of the joint venture company or wholly owned subsidiary; (d) Investment in agricultural operations through overseas offices or directly; (e) External Commercial Borrowing in conformity with other parameters of the ECB guidelines; (f) Fifty per cent of the value of performance guarantee issued by the Indian party to or on behalf of the JV/WOS. Explanation : In cases where invocation of the performance guarantees breach the ceiling for the financial exposure of 100 per cent, or as decided by the Reserve Bank from time to time, of the net worth of the Indian party, the Indian party shall seek the prior approval of the Reserve Bank before remitting funds from India, on account of such invocation. (g) Hundred per cent of the value of the bank guarantee issued by a resident bank on behalf of an overseas JV/WOS of the Indian party, which is backed by a counter guarantee/ coll ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the net worth, the following shall be reckoned, namely:] (a) cash remittance by market purchase (b) capitalisation of export proceeds and other dues and entitlements as mentioned in Regulation 11 and 12; (c) 10hundred per cent of the value of guarantees issued by the Indian party to or on behalf of the Joint Venture company or Wholly Owned Subsidiary 11Explanation:- an Indian Party may offer to a person resident outside India any form of guarantees, that is, corporate or personal / primary or collateral / guarantee by promoter company in India / guarantee by group company, sister concern or associate company in India, provided that : a) total 'financial commitment' including all forms of guarantees remains within the overall ceiling stipulated for overseas investment by an Indian Party and b) no guarantee is 'open ended'. (d) utilisation of the amount raised by issue of ADRs/GDRs by the Indian party; (e) External Commercial Borrowing in conformity with other parameters of the ECB guidelines. 12(f) Swap of shares. 13(g) ADR/GDR Stock Swap subject to the valuation norms and sectoral cap. Explanation: for the purpose of reckoning net worth of an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vided the provisions under Regulation 6 are fulfilled by the Indian party and further provided that: a) total 'financial commitment' including all forms of guarantees remains within the overall ceiling stipulated for overseas investment by an Indian Party and b) no guarantee is 'open ended'] 25[(iv) With prior approval of the Reserve Bank, an Indian party may undertake financial commitment without equity contribution in JV / WOS provided it is as per the business requirement of the Indian party and also as per the legal requirement of the host country.] 26[(v) Compulsorily Convertible Preference Shares (CCPS) shall be treated at par with equity shares and the Indian party is allowed to undertake financial commitment based on the contribution to JV by way of CCPS.] (5) An Indian Party may make direct investment without any limit in any foreign security out of the proceeds of its international offering of shares through the mechanism of ADR and/or GDR: - Provided that:- (a) the ADR/GDR issue has been made in accordance with the Scheme for issue of Foreign Currency Convertible Bonds and Ordinary Shares (through Depository Receipt Mechanism) Scheme 1993 an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cial commitment of the Indian party in Joint Ventures/Wholly Owned Subsidiaries 3shall not exceed 200% of the net worth of the Indian Party as on the date of the last audited balance sheet;" - 2(i) has been further substituted vide notification no. 173/2007 dated 19-12-2007 with effect from 26-9-2007, before substitution it was read as: "(i) The total financial commitment of the Indian Party in Joint Ventures/Wholly Owned Subsidiaries shall not exceed 300% of the net worth of the Indian Party as on the date of the last audited balance sheet". 6. Has been substituted vide Notification No. G.S.R. 13(E) dated 9/10/2007 (with effect from the 14th day of June, 2007) before it was read as, "For the purpose of determining 'total financial commitment' within the 4limit of 200% of the net worth,". Further substituted vide notification no. 173/2007 dated 19-12-2007 with effect from 26-9-2007, before substation it was read as, "For the purpose of determining 'total financial commitment' within the limit of 200% or 300% of the net worth as the case may be". 7. For the words "fifty per cent of the value of guarantees", the words &q ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7th day of July, 2004 ) 13. Has been inserted vide Notification No. G.S.R. 13(E) dated 9/10/2007 (with effect from the 20th day of April, 2007) 14. Has been substituted vide Notification No. 180/2008 dated 5/9/2008 before it was read as, "iv. The Indian party has submitted up to date returns in form APR in respect of all its overseas investments;" 15. Has been substituted vide Notification No. 180/2008 dated 5/9/2008 before it was read as, "vi. The Indian Party submits form ODA, duly completed, to the designated branch of an authorised dealer." 16. Has been substituted vide Notification No. 180/2008 dated 5/9/2008 before it was read as, "b. the Indian Party files with the designated authorised dealer in form ODA full details of the investment proposed." 17. Substituted vide notification no. 192/2009 dated 25/5/2009 with effect from 6/9/2006, before it was read as, "(and Regulation 7 in case investment in financial services sector)" 18. Substituted vide Notification No. FEMA 249/RB-2012, dated 22-11-2012, before it was read as:- "Notwithstanding anything contained in these Regulations investment in Pakistan shall not be permitted." 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r the approval route under regulation 9 of this Notification.] 19[(f) Fifty per cent of the value of performance guarantee issued by Indian Party to or on behalf of the JV/WOS. Explanation: In cases where invocation of the performance guarantees breach the ceiling for the financial exposure of 400 per cent of the net worth of the Indian Party, the Indian Party shall seek the prior approval of the Reserve Bank before remitting funds from India, on account of such invocation.] 20[(g) hundred per cent of the value of the bank guarantee issued by a resident bank on behalf of an overseas JV / WOS of the Indian party, which is backed by a counter guarantee / collateral by the Indian party.]" 28. Substituted vide NOTIFICATION NO. 283/2013-RB dated 14th August, 2013, earlier it was read as, "drawal of foreign exchange from an authorized dealer in India shall not exceed 400% of the net worth of the Indian Party as on the date of last audited balance sheet; Explanation: For the purpose of the limit of 400 % of the net worth the following shall be reckoned, namely:" 29. Substituted vide NOTIFICATION NO. 283/2013-RB dated 14th August, 2013, earlier it was read as, "21[(h) Fifty per ce ..... X X X X Extracts X X X X X X X X Extracts X X X X
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