Foreign Exchange Management Act (FEMA)
The Foreign Exchange Management Act, 2000 (FEMA) is an Act of the Parliament of India "to consolidate and amend the law relating to foreign exchange with the objective of facilitating external trade and payments and for promoting the orderly development and maintenance of foreign exchange market in India".
In India, Foreign Direct Investment Policy is regulated under the Foreign Exchange Management Act, 2000 (FEMA) governed by the Reserve Bank of India.
FDI in India
The important aspect of monetary source for India’s Economic Development is Foreign Direct Investment (FDI). Economic liberalization has begun in India during the year 1991 and since then, FDI has steadily increased in the country. FDIs not only brought money with them but also skills, technology and knowledge, which had a huge impact on the Indian Economy.
FDI - Routes
Automatic Route: FDI under the automatic route does not require any prior approval either from the Government of India nor from Reserve Bank of India. The investors are only required to notify the concerned regional office of the RBI within 30 days from the date of receipt of inward remittances and file the required documents within 30 days of issuance of shares to foreign investors.
Government Route: Under the approval route, the proposals are considered in a time-bound and transparent manner by the Foreign Investment Facilitation Portal (FIFB) administered by the Department of Industrial Policy & Promotion (DIPP), Ministry of Commerce and Industry, Government of India. Approvals of composite proposals involving foreign investment/ foreign technical collaboration are also granted on the recommendations of the Foreign Investment Facilitation Portal (FIFB).
Proposals from NRIs and Export Oriented Units, applications relating to issues of equity for import of capital goods / equipment, pre-operative / pre-incorporation expenses, etc. are also handled by Department of Industrial Policy & Promotion (DIPP).
Categories of foreign investors –
Non-resident entities are permitted to invest in India either under Automatic Route or Government Approval Route, except in prohibited sectors. However, Entities or individuals from Bangladesh and Pakistan can invest only through Government Route.
FDI is a capital account transaction and any violation of its regulations attracts penal provisions under FEMA. Reserve Bank of India controls FEMA and Directorate of Enforcement, Ministry of Finance, Government of India has the authority to investigate in case of any violation of its rules.
Kireeti consultants has expanded the scope of services in the subject matters of FEMA in addition to the existing technical expertise in Foreign Trade Policy (STP), Exim services, customs, direct and indirect taxation.
Kireeti consultants have the double-edged advantage of being subject matter experts in the Foreign Trade Policy and FEMA Act 2000. We offer one-stop solutions to the industries, who are in the field of Exports and Imports and have regular flow foreign exchange and our services are unbeatable in this competitive market.
FDI prohibited Industrial Sectors:
There are certain industry sectors where FDI is strictly prohibited under any route. These sectors are
KC Scope of Services
Our expert team comprising Chartered Accountants, Company Secretaries, and other professionals provide perfect matching services across leading industries related to Foreign Direct Investment (FDI). As a professional company, we take your pain and make your business start easier