1. Dr. Manuelpillai Paul Dominic
Investment in India
Dr. Manuelpillai Paul Dominic

2. Basic Regulations Governing the Entry by Foreign Investors
Specific approval is required for a few sectors and no investment in a few sensitive sectors
In all other sectors, foreign investment is allowed on an automatic basis up to the permissible limit set for a sector
Prior approval is required in cases where the foreign investor has an existing joint venture

3. The Automatic Route
Requiring no prior approval. Applies to all proposals that are completely in line with the investment guidelines prescribed for the sector
Name of the collaborators, details of allotment, copy of the foreign collaboration agreement, the original foreign inward remittance certificate from the authorized dealer and other specified information are to be provided to the RBI within 30 days

4. The Specific Approval Route
Requires prior approval by the Foreign Investment Promotion Board (FIPB), Department of Economic Affairs, Ministry of Finance
Weightage is given to the employment potential, potential inflow of foreign exchange through exports, long term competitive advantage to India and favourable alignment of the proposals with government priorities

5. Regulation Governing Relations with Parent Comapny
Liberalised foreign exchange control means the trade account of India is fully convertible
Full capital convertibility is yet to be introduced but specific transfers such as capital and profits of foreign investment in approved industrial activities are allowed on the capital account

6. Procedure for Profit Repatriation
Profit repatriation can be in the form of dividends and bonus shares or from capital gains from the sale of investments in India
Dividend to foreign shareholders must be repatriated within 42 days of their being announced, after submitting the necessary documentation to the RBI

7. Foreign Technology Agreement
Allowed in all industries
Automatic approval as long as it is within the following ceilings
Payment of no more than USD 2 million and royalties up to 5% on domestic sales and 8% on export sales

8. Royalties and Withholding Taxes
The incidence of withholding taxes on fees, royalties, dividends and business income, as well as the relief given under various bilateral tax treaties must be checked to arrive at the realistic repatriation values.
Royalty agreements are valid for only 10 years

9. Prohibited Sectors Retail trading Atomic energy Lottery business
Gambling and betting

10. Policy Specific Sectors
Airports
Banking
Coal and Lignite
Mining
Petroleum and Natural Gas
Refining
Telecommunications etc.

11. Sectors Other than Prohibited and Policy Specific Sectors
100% automatic route