In majority of cases , 100% FDI is permitted without any prior approval from RBI or FIPB.
However , Approval is required for licensed industries such as hazardous chemicals and defense equipment .
Some Sectors have FDI cap which is detailed below :
Sector FDI Cap
• Private Banking 74%
• Telecom 74%
• Civil Aviation 49%
• Insurance 26%
• Single Brand Retail 51%
• News Media 26%
• Defense Sector 26%
- Development of Townships , Housing , Built-up infrastructure and Construction -development projects- 100%
• Agriculture with some exceptions
• Gambling & Lottery
• Retail (except Single Brand retail)
• REAL estate - Real Estate Business or Construction of Farm Houses
• Tobacco Products
Trading in Transferable Development Rights (TDRs).
Reserved For Government Sector only
• Atomic Energy
Reporting of FDI to RBI –Procedures
In case of FDI only , allotment has to be made within 180 days of receipt of funds in India and investee company has to report to RBI within 30 days on receipt of funds. There is a separate form for this and it is known as “ Foreign Inward Remittance Reporting Form “. After filing this , RBI will allot a UIN (Unique Identification Number ) for each FDI reported to RBI. Allotment has to be made within 180 days of receipt of funds and Form FC-GPR is to be filed with your regional RBI within 30 days of allotment through your authorised dealer ( banker).
Along with the Form FC-GPR , the following certificates will have to be enclosed:
• A certificate from the Company Secretary of the company accepting investment from persons resident outside India certifying that
o All the requirements of the Companies Act, 1956 have been complied with;
o Terms and conditions of the Government approval, if any, have been complied with;
o The company is eligible to issue shares under these Regulations, and
o The company has all original certificates issued by Authorized Dealers in India evidencing receipt of amount of consideration.
• A certificate from Statutory Auditors or a Chartered Accountant indicating the manner of arriving at the price of the shares issued to the persons resident outside India.
In case of issue of bonus shares by an Indian company , even though there is no inflow of funds and but , the company has to file Form FC-GPR within 30 days of allotment of bonus shares to a foreign company through its authorised dealer.