Master Direction – Foreign Investment in India
This Master Direction outlines the framework for foreign investment in India, including prohibited sectors and persons, equity instruments, entry routes, and permitted sectors.
Prohibited Sectors/Persons: Certain sectors and persons are prohibited from receiving foreign investment, including lottery business, gambling, and chit funds.
Equity Instruments: The direction covers various equity instruments, including equity shares, partly paid shares, share warrants, debentures, and preference shares.
Entry Routes and Permitted Sectors: Foreign investment can be made through various entry routes, including automatic route, government route, and approval route. Sectoral caps are also specified for certain sectors.
Permitted Investments: The direction outlines permitted investments by persons resident outside India, including acquisition through rights issue or bonus issue, issue of ESOP and sweat equity shares, and issue of convertible notes by Indian startup companies.
Transfer of Shares: The direction also covers the transfer of shares, including transfer of shares from resident to non-resident and vice versa.
This Master Direction is updated up to March 17, 2022, and supersedes all previous directions on the subject.
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Download: Master Direction – Foreign Investment in India (Updated up to March 17, 2022)