Foreign Direct Investment (FDI) in India

Foreign direct investment (FDI) is when a company takes controlling ownership in a business entity in another country. With FDI, foreign companies are directly involved with day-to-day operations in the other country. This means they aren’t just bringing money with them, but also knowledge, skills and technology.

FDI is an important monetary source for India's economic development. Economic liberalisation started in India in the wake of the 1991 crisis and since then, FDI has steadily increased in the country. India, today is a part of top 100-club on Ease of Doing Business (EoDB) and globally ranks number 1 in the greenfield FDI ranking. During the fiscal ended March 2019, India received the highest-ever FDI inflow of $64.37 billion. The FDI inflows were $45.14 billion during 2014-15 and $55.55 billion in the following year.

Government of India has categorised the FDI into two process based on the end use of the investment i.e. sector in which the investee entity is engaged;

Automatic route: The non-resident or Indian company does not require prior nod of the RBI or government of India for FDI.

Govt route: The government's approval is mandatory.

Here in India, there are few rules and regulations under Foreign Exchange Management Act, (FEMA) 1999, which have to be followed when we are receiving Investments in foreign currency. Breaking the stipulations of this Act whether knowingly or unknowingly could land you and your business in great trouble, which could potentially see your business fined heavily or even shut down. To avoid that, it's best to consult a professional FEMA consultancy service if you are not familiar with the Act. We offer that particular consultancy service.

Our services in this area include:

-An online reporting platform for reporting of foreign investment in India in SMF. (A master form which provides for the reporting of 9 forms for foreign investment viz., FC-GPR, FC-TRS, LLP-I, LLP-II, CN, DRR, ESOP, DI, InVi.)

- Registration under FCRA

- Setting up of Wholly Owned Subsidiaries, Joint Ventures and Branch Offices in India and overseas

- Assisting in obtaining the required approvals from the Foreign Investment Promotion Board, Govt. of India

- Foreign Direct Investment Compliances

- External Commercial Borrowing Compliances