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NRI Investment Approval

Trade Policy
Foreign Direct Investment Approval
NRI Investment Approval
Foreign Investment Regulations
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NRI Investment Approval

A liberal policy for permitting investment of upto 100% equity wth full repatriation facilities in industrial ventures in high priority industries by Non-Resident Indians (NRIs) and Overseas Corporation Bodies (OCBs) has been announced. It has also been decided to permit 100% NRI investment with full repatriation benefits in Export/ Trading/ Star Trading House also.

India permits free repatriation of profits after payment of the applicable taxes for all approved investments other than in few specified industries. In these consumer goods industries, repatriation of profits is allowed only out of net foreign exchange earnings during an initial period of seven years from the commencement of production.

However, there are procedural requirements for obtaining RBI approval for repatriation of Branch profits or dividend by an Indian company which has more than 40 percent of equity. On disinvestment, capital may be repatriated subject to the sale price being considered reasonable by the RBI and payment of applicable taxes.

Government of India has established a Special Empowered Board called Foreign Investment Promotion Board in the Ministry of Industry, to negotiate with large international firms and to approve direct foreign investment in selected areas.

The objective of this Board will be to invite and facilitate investment in India by international companies in projects which are considered to be of benefit to the Indian economy and do not fall within the parameters of the existing policy for clearance of foreign investment proposals.

The functions of the Board shall mainly comprise:

  • Expeditious clearance of proposals;
  • Establishment of contact with and inviting selected international companies to invest in India in appropriate ventures; and
  • To periodically review the implementation of projects cleared by the Board. The Board will provide a single window clearance for all aspects of project proposals considered by it. No formal application forms are prescribed; the entrepreneur can directly correspond with the Board.

NRI Investment Approval

  • Non-Resident Indians (NRIs) allowed to invest upto 100% equity with full benefits of repatriation in most industry sectors.
  • There is no restriction on the extent of equity that can be held by a Non-Resident Indian (NRI) as an individual/partner in a MSME unit.
  • NRIs and Overseas Corporate Bodies (OCB) predominantly owned by NRIs are allowed to invest upto 100% foreign equity in high priority industries with full repatriation benefits.

To set up large industrial ventures in products reserved for the small scale sector, the unit has to take up a 50% export obligation.