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
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
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
The functions of the Board shall mainly comprise:
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.
- 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.