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Indian Direct Investment outside India
A.P. (DIR Series) Circular No. 27 dated
2nd March 2002
Attention of authorised dealers is
invited to Foreign Exchange Management (Transfer or Issue of any Foreign
Security) Regulations, 2000 notified by the Reserve Bank vide Notification No.
FEMA 19/RB-2000 dated May 3, 2000 and amended from time to time.
2. With a view to
further liberalising and broad basing the policy on overseas direct investment
by Indian parties, the Reserve Bank has, vide Notification No. FEMA 53/2002-RB
dated March 1, 2002 (copy enclosed) further amended the said Regulations. The
salient features of the amendments are as under:
i. Under the
Automatic Route as per Regulation 6 of the Notification No. FEMA 19 dated May 3,
2000, Indian parties may now invest in JV/WOS outside India, an amount not
exceeding US$ 100 mn. or its equivalent in a financial year as against the
existing limit of US$ 50 mn. in a financial year.
ii. As per the
existing provisions of Notification No. FEMA 19, investment under the automatic
route as per Regulation 6 may be funded by drawal of foreign exchange from an
authorised dealer not exceeding 25% of the net worth of the Indian party as on
the date of last audited balance sheet. This limit has now been raised to 50% of
the net worth.
3. Authorised dealers
may bring the contents of this circular to the notice of their constituents
concerned.
4. The directions
contained in this circular have been issued under Section 10(4) and Section
11(1) of the Foreign Exchange Management Act, 1999 (42 of 1999).
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