Consolidated FDI Policy Circular of 2017
The Department of Industrial Policy & Promotion is the nodal Department for formulation of the policy of the Government on Foreign Direct Investment (FDI). It is also responsible for maintenance and management of data on inward FDI into India, based upon the remittances reported by the Reserve Bank of India.
The Department of Industrial Policy and Promotion (DIPP) – the nodal agency for FDI policy – said the new “circular will take effect” from Monday. The circular is updated annually.
For the first time, the document has included start-ups. As per the norms, start-ups can raise up to 100 per cent of funds from Foreign Venture Capital Investor (FVCI). The document said the start-ups can issue equity or equity linked instruments or debt instruments to FVCI against receipt of foreign remittance.
Besides, it said a person residing outside India (other than citizens/entities of Pakistan and Bangladesh) will be permitted to purchase convertible notes issued by an Indian start-up company for an amount of Rs 25 lakh or more in a single tranche. Non Resident Indians can also acquire convertible notes on non- repatriation basis.
“Start-ups can issue convertible notes to person resident outside India (subject to certain conditions),” the document said. A start-up company engaged in a sector where foreign investment requires Government approval may issue convertible notes to a non-resident only with approval of the Government,” it said. The start-up issuing convertible notes would be required to furnish reports as prescribed by the RBI, it added.
The last one year has seen FDI policy being liberalised in sectors, including defence, civil aviation, construction and development, news broadcasting and private security agencies. These reforms have been incorporated in the document.
The FDI policy is reviewed on an ongoing basis, with a view to making it more investor-friendly. To attract higher levels of FDI, Government has put in place a liberal policy on FDI, under which FDI up to 100%, is permitted, under the automatic route, in most sectors/activities. Significant changes have been made in the FDI policy regime in recent times, to ensure that India remains an increasingly attractive investment destination. The Department plays an active role in the liberalization and rationalization of the FDI policy. Towards this end, it has been constructively engaged in extensive stakeholder consultations on various aspects of the FDI policy.
The FDI Policy Guidelines are present at the following link: Click Here
Press Notes and Press releases :
The Press Notes are available at the link Click Here