Vide its Circular No. RBI/2012-13/15 Master Circular No.15/2012-13 dated July 02, 2012, has issued the master circular on Foreign Direct Investment (FDI) in India is. The circular provides two routes for foreign investments in India i.e., automatic route and the government route. It gives a description of the eligibility for foreign investments in India and the mode of payment, the details of the foreign Investment limits, prohibited sectors and investment in MSEs.
Foreign Direct Investment in India can be done through the issuance of fresh shares by the company, acquisition by way of transfer of existing shares by person resident in or outside India, transfer of shares by a Person resident outside India, transfer of shares/convertible debentures from Resident to Person Resident outside India, transfer of Shares by Resident which requires Government approval, issue of shares under Employees Stock Option Scheme (ESOPs), conversion of ECB / Lumpsum Fee / Royalty / Import of capital goods by SEZs in to Equity/ Import payables / Pre incorporation expenses, issue of shares by Indian Companies under ADR/GDR and through issue/transfer of participating interest/right in oil fields to a non resident.
The master circular also contains detailed guidelines for the foreign investments under Portfolio Investment Scheme (PIS), foreign Venture Capital Investments, other Foreign Investments, investment in Partnership Firm / Proprietary Concern, investments with repatriation benefits and investment by non-residents other than NRIs/PIO.
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