(i) Foreign investment in India is subject to policy guidelines framed by the Government of India from time to time in accordance with its Industrial Policy. In terms of the Industrial Policy announced by the Government of India on 24th July 1991 followed by subsequent guidelines issued by them, foreign equity upto 50%/51%/74%, as the case may be, is permitted by Reserve Bank under the Automatic Route in specified industries/services sector. Applications which do not conform to the parameters of the Automatic Route, are required to be made to the Secretariat for Industrial Assistance (SIA), Ministry of Industry, Government of India, New Delhi. Foreign Institutional Investors are permitted to invest in all securities in primary and secondary markets in India as per guidelines issued by Ministry of Finance, Government of India, New Delhi.

(ii)A wide range of facilities for making investments in India in shares and securities, bank deposits, company deposits, etc. is available to individuals of Indian nationality or origin resident outside India (NRIs) and overseas corporate bodies predominantly owned by such persons (OCBs). They are subject to different rules and investments both with repatriation and non-repatriation benefits are permitted under various schemes.

(iii)Foreign investment in India is also subject to regulation through the various provisions of FERA 1973. However, once foreign investment is approved by Government under its foreign investment and industrial policy, requisite approvals under FERA 1973 are granted by Reserve Bank in pursuance of the Government approval/guidelines. While the relative provisions of FERA 1973 have been explained in Part A, detailed regulations governing investments and certain ancillary matters such as remittance of dividend, royalty and technical know-how fee, sale/transfer of shares, repatriation of capital, etc. are given in Part B. The various schemes for investment by NRIs/OCBs and other matters relating to loans, overdrafts and guarantees to non-residents have been explained in Parts C and D respectively.

NOTE: Regulations relating to foreign investment in immovable property in India have been explained in