Rbi Master Circular - Foreign Investment

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Part – I
Foreign Investments in India—Schematic Representation:

Foreign Investments

Foreign Direct Investments

Foreign Portfolio Investments

Foreign Venture Capital Investments

Other investments
(G-Sec, NCDs, etc)

Investments on non-repatriable basis

Automatic Route

Govt. Route

Persons Resident outside India

FIIs

NRIs, PIO

FIIs SEBI regd. FVCIs

NRIs, PIO

NRIs, PIO

VCF, IVCUs

RBI/2010-11/13 Master Circular No.13/2010-11 To, All Category - I Authorised Dealer banks Madam / Sir, Master Circular on Foreign Investment in India

July 01, 2010

Foreign investment in India is governed by sub-section (3) of Section 6 of the Foreign Exchange Management Act, 1999 read with Notification No. FEMA 20/2000-RB dated May 3, 2000, as amended from time to time. The regulatory framework and instructions issued by the Reserve Bank have been compiled in this Master Circular. The list of underlying circulars/notifications is furnished in Appendix. In addition to the above, this Master Circular also covers the area of Investment in capital of partnership firms or proprietary concern which is regulated in terms of Section 2(h) of Section 47 of Foreign Exchange Management Act, 1999, read with Notification No. FEMA 24/2000-RB dated May 3, 2000. 2. This Master Circular is being issued with a sunset clause of one year. This

circular will stand withdrawn on July 1, 2011 and be replaced by an updated Master Circular on the subject.

Yours faithfully,

(Salim Gangadharan) Chief General Manager-in-Charge

INDEX
PART – I ................................................................................................................................................................0 FOREIGN INVESTMENTS IN INDIA—SCHEMATIC REPRESENTATION: ................................................................0 SECTION - I: FOREIGN DIRECT INVESTMENT .........................................................................................................1 1. FOREIGN DIRECT INVESTMENT IN INDIA..........................................................................................1 2. ENTRY ROUTES FOR INVESTMENTS IN INDIA .................................................................................1 3. PROHIBITION ON INVESTMENT IN INDIA...........................................................................................2 4. ELIGIBILITY FOR INVESTMENT IN INDIA............................................................................................4 5. TYPE OF INSTRUMENTS .....................................................................................................................5 6. INVESTMENTS IN MICRO AND SMALL ENTERPRISE (MSE)............................................................6 7. INVESTMENTS IN ASSET RECONSTRUCTION COMPANIES (ARCS) .............................................6 8. INVESTMENT IN INFRASTRUCTURE COMPANIES IN THE SECURITIES MARKET .......................7 9. INVESTMENT IN CREDIT INFORMATION COMPANIES.....................................................................7 10. INVESTMENT IN COMMODITY EXCHANGES .....................................................................................8 11. INVESTMENT IN PUBLIC SECTOR BANKS.........................................................................................8 12. INVESTMENTS FROM NEPAL & BHUTAN...........................................................................................8 13. ISSUE OF RIGHTS / BONUS SHARES.................................................................................................8 14. PRIOR PERMISSION OF RESERVE BANK FOR RIGHTS ISSUE TO ERSTWHILE OCBS ...............9 15. ADDITIONAL ALLOCATION OF RIGHTS SHARE BY RESIDENTS TO NON-RESIDENTS................9 16. ACQUISITION OF SHARES UNDER SCHEME OF MERGER / AMALGAMATION .............................9 17. ISSUE OF SHARES UNDER EMPLOYEES STOCK OPTION SCHEME (ESOPS) ...........................10 18. REPORTING OF...
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