Overseas Direct Investments - ఆర్బిఐ - Reserve Bank of India
Overseas Direct Investments
RBI/2013-14/180 August 14, 2013 To All Category-I Authorised Dealer Banks Madam / Sir, Overseas Direct Investments Attention of Authorised Dealer Category - I (AD Category - I) banks is invited to the Notification No. FEMA.120/RB-2004 dated July 7, 2004, [Foreign Exchange Management (Transfer or Issue of Any Foreign Security) Regulations, 2004], as amended from time to time (the Notification) and the A.P. (DIR Series) Circular No. 11 dated September 26, 2007; A.P. (DIR Series) Circular No. 48 dated June 3, 2008 and A.P. (DIR Series) Circular No. 99 dated April 23, 2013. On a review, it has been decided to rationalize the regulations governing the overseas direct investments with immediate effect as under: 2. Reduction of limit for Overseas Direct Investment In terms of the extant provisions under the Foreign Exchange Management Act, 1999 (FEMA, 1999) on overseas direct investments, the total overseas direct investment (ODI) of an Indian Party in all its Joint Ventures (JVs) and / or Wholly Owned Subsidiaries (WOSs) abroad engaged in any bonafide business activity should not exceed 400 per cent of the net worth of the Indian Party as on the date of the last audited balance sheet under the Automatic Route. It has now been decided:
3. In respect of the Navaratna Public Sector Undertakings (PSUs), ONGC Videsh Limited (OVL) and Oil India Ltd (OIL), the extant provision for investing in overseas unincorporated entities and the overseas incorporated entities in the oil sector (i.e., for exploration and drilling for oil and natural gas, etc.), which are duly approved by the Government of India, without any limits under the automatic route, would however continue as hitherto. 4. The above provisions shall come into effect with immediate effect and would apply to all fresh Overseas Direct Investment proposals on a prospective basis but would not apply to the existing JV/WOS set up under the extant regulations. 5. AD Category - I banks may bring the contents of this circular to the notice of their constituents and customers concerned. 6. Necessary amendments to the Notification No. FEMA.120/2004-RB dated July 7, 2004, [Foreign Exchange Management (Transfer or Issue of Any Foreign Security) Regulations 2004] are being notified separately. 7. The directions contained in this circular have been issued under sections 10(4) and 11(1) of the Foreign Exchange Management Act 1999 (42 of 1999) and are without prejudice to permissions / approvals, if any, required under any other law. Yours faithfully, (C.D. Srinivasan)
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