NEW DELHI: The Centre on Monday notified the overseas investment rules and regulations, simplifying the existing framework and aligning it with current business and economic dynamics.
"In view of the evolving needs of businesses in India, in an increasingly integrated global market, there is a need for Indian corporates to be part of the global value chain," said a finance ministry statement. "Clarity on overseas direct investment and overseas portfolio investment has been brought in and various overseas investment related transactions that were earlier under approval route are now under automatic route, significantly enhancing 'ease of doing business'," according to the statement.
The Centre in consultation with the RBI undertook a comprehensive exercise to simplify these regulations. Draft Foreign Exchange Management (Overseas Investment) Rules and draft Foreign Exchange Management (Overseas Investment) Regulations were also put in the public domain for consultations.
Extant regulations linked to Overseas Investments and Acquisition and Transfer of Immovable Property Outside India have been subsumed within these rules and regulations.
Currently, the overseas investment by a person resident in India is governed by the Foreign Exchange Management (Transfer or Issue of Any Foreign Security) Regulations, 2004 and the Foreign Exchange Management (Acquisition and Transfer of Immovable Property Outside India) Regulations, 2015.
Nothing in these rules or the Foreign Exchange Management (Overseas Investment) Regulations, 2022 shall apply to - (a) any investment made outside India by a financial institution in an IFSC (International Financial Centre), acquisition or transfer of any investment outside India made, (i) out of resident foreign currency account; or (ii) out of foreign currency resources held outside India by a person who is employed in India for a specific duration irrespective of length or for a specific job or assignment, duration of which does not exceed three years.
