RBI/2013-14/255
A.P. (DIR Series) Circular No. 44
September 13, 2013
To
All Category - I Authorised Dealer Banks
Madam/ Sir,
Foreign Direct Investment (FDI) in India – Review of FDI policy – definition for
control and sector specific conditions
Attention of Authorised Dealer Category – I (AD Category-I) banks is invited to
Annex B of Schedule 1 to the Foreign Exchange Management (Transfer or Issue of
Security by a Person Resident outside India) Regulations, 2000 notified by the
Reserve Bank vide
Notification No. FEMA. 20/2000-RB dated 3rd May 2000, as
amended from time to time whereby description of sectors/activities wherein the
entry norms, sectoral cap and other conditions for sectors/activities in which
FDI is permitted under Government route and Automatic route are specified.
- Attention of Authorised Dealer Category – I (AD Category-I) banks is also
invited to Annex to
A.P. (DIR Series) Circular 01 of July 04, 2013 whereby the
definitions for ownership and control for an Indian company has been given .
- It has been decided to revise the definition of the term ‘control’ as under;
'Control' shall include the right to appoint a majority of the directors or to
control the management or policy decisions including by virtue of their
shareholding or management rights or shareholders agreements or voting
agreements.
- Government of Himachal Pradesh and Karnataka have given consent to implement
the FDI policy on Multi Brand Retail Trading in Himachal Pradesh and Karnataka
respectively. As such, the list of States/Union Territories which have conveyed
their concurrence stands modified. Further, the extant policy on FDI caps and
routes for various sectors has since been reviewed. Accordingly, in order to
bring uniformity in the sectoral classification position for FDI as notified
under the Consolidated FDI Policy Circular with the FEMA Regulations, Annex B of
Schedule 1 to
Notification No. FEMA. 20/2000-RB dated 3rd May 2000, has been
suitably revised and the updated list is given at the Annex.
- A copy each of Press Note No.1 (2013 Series) dated June 3, 2013, Press Note
No. 3 (2013 Series) dated July 4, 2013 and Press Note Nos. 4, 5 and 6 (2013
Series) dated August 22, 2013 issued by Department of Industrial Policy and
Promotion (DIPP), Ministry of Commerce & Industry, Government of India in this
regard is enclosed.
- AD Category - I banks may bring the contents of the circular to the notice
of their customers/constituents concerned.
- Reserve Bank has since amended the Regulations and notified vide
Notification
No. FEMA. 285/2013-RB dated August 30, 2013 vide G.S.R. No.597(E).
- 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,
(Rudra Narayan Kar)
Chief General Manager-In-Charge