FDI Policy Amendment as on 23.01.2018

Para 5.2 (h) of FDI Policy is replaced with the following:

Wherever the foreign investor wishes to specify a particular auditor/audit firm having international network for the Indian investee company, then audit of such investee companies should be carried out as joint audit wherein one of the auditors should not be part of the same network.

Existing Para 5.2 (h) shall be renumbered as 5.2 (i)

3.8.3.2 Those companies, which are Core Investment Companies (CICs), will have to additionally follow RBI’s Regulatory Framework for CICs.

Foreign Investment in Investing Companies registered as Non-Banking Financial Companies (NBFC) with the Reserve Bank of India, being overall regulated, would be under 100% automatic route.

(B) Para 3.8.3.2 of FDI Policy is amended to read as under:

Foreign Investment in Core Investment Companies (CICs) and other investing companies, engaged in the activity of investing in the capital of other Indian company/ies/LLP, is permitted under Government approval route. CICs will have to additionally follow RBI’s regulatory framework for CICs.

Para 4.1.1 (ix) of FDI Policy is amended to read as under:

a

B. Following new clause (d) is added to Other Conditions laid down at Para 5.2.9 of FDI Policy:

(d) In addition to the above conditions, foreign investment in M/s Air India Pvt. Ltd shall be subject to the following conditions:

(i) Foreign investment(s) in M/s Air India Pvt. Ltd., including that of foreign airline(s), shall not exceed 49% either directly or indirectly.

(ii) Substantial ownership and effective control of M/s Air India Pvt. Ltd. shall continue to be vested in Indian Nationals.

Para 5.2.10.2 Note (vi):

Notwithstanding anything contained in Para 5.2.10 above, it is clarified that real-estate broking service does not amount to real estate business and 100% foreign investment is allowed in the activity under automatic route.

Medical device means-

a. any instrument,……………………..

 (i),…………………………..

(ii) ………………………….any injury or handicap;

(iii) ……………………………………………….

b. an accessory to such an instrument, apparatus, appliance, material or other article;

c. a device …………………………. specimens derived from the human body or animals.

iii. The definition of medical device at Note (ii) above would be subject to the amendment in Drugs and Cosmetics Act.

Para 6 (iv) …………..

Issue of equity shares under the FDI policy is allowed under the Government route for the following:

(I) import of capital goods……………………………….

(a)Any import………………………….

 (b)The application ……………………………..

(c)Applications complete in all ………………. goods.

 (II) pre-operative …………………………. conditions:

(a)Submission of FIRC …………………………. incurred.

(b)Verification and …………………… the statutory auditor.

(c) Payments should be made ……………. under FEMA Regulations.

(d)The applications, ………………. of the company.

General conditions:

(i) All requests …………………………… of the company.

(ii)Government’s …………………………….tax clearance.

(A) Definition of “Medical Device” as contained at Para 5.2.27.3 Note (ii) of FDI Policy is amended to read as under:

Medical device means –

(a) any instrument,………………………….

(i) ………………………

(ii) ……………………….., any injury or disability;

(iii) ……………………………………………..

(b) an accessory to such an instrument, apparatus, appliance, material or other article;

(c) in-vitro diagnostic …………………………. the human bodies or animals.

(B) Para 5.2.27.3 Note (iii) of FDI Policy which presently reads that “the ……………Drugs and Cosmetics Act”, is deleted.

10. Para 6(iv) of Annexure-3 of FDI Policy is amended to read as under:

Issue of equity shares for sectors requiring Government approval under the FDI policy is allowed under the Government route for the following:

(I) import of capital goods/ ……………………..:

(a) Any import of ……………………imports.

(b) The application ………………………………..

(c) Applications complete in all …………… goods.

(11) pre-operative ……………………. conditions:

(a) Submission of FIRC ……………… incurred.

(b) Verification and ……………………… auditor.

(c) Payments should be ……….. FEMA Regulations.

(d) The applications, ………………….the company.

General conditions:

(i) All ……………………………….of the company.

(ii) Government’s …………………… tax clearance.

(iii) For sectors under automatic route, issue of equity shares against import of capital goods/ machinery/ equipment (excluding second-hand machinery) and pre- operative/pre- incorporation expenses (including payments of rent etc.) is permitted under automatic route subject to compliance with respective conditions mentioned above, and reporting to RBI in form FC-GPR as per procedure prescribed under the FDI policy.