FDI Compliance — Inbound Foreign Investment

Within 30 days of receiving funds, the Indian company must file Form FC-GPR with its AD Category-I bank under Regulation 13 of the FEMA (Non-Debt Instruments) Rules, 2019. Late filing is a FEMA contravention compoundable under Section 15 of FEMA 1999 read with the Compounding Rules 2023.

Sector-wise entry routes and caps are set out in Schedule I of FEMA (NDI) Rules, 2019 and updated by DPIIT via Press Notes. For example, defence manufacturing beyond 74% and multi-brand retail require government approval; most manufacturing sectors allow 100% under automatic route. We check the current Schedule I and applicable Press Notes before structuring the investment.

An Indian company that has received FDI and then invests in another Indian entity must file Form DI within 30 days under Regulation 14 of FEMA (NDI) Rules, 2019. Indirect foreign investment is calculated per the methodology in the NDI Rules read with DPIIT policy circulars.

Yes. Every Indian company with outstanding FDI must file the Annual Return on Foreign Liabilities and Assets (FLA Return) with RBI by 15 July each year, reporting total foreign investment as at 31 March, under Regulation 13(3) of FEMA (NDI) Rules, 2019. Non-filing attracts penalty under Section 13 of FEMA 1999.

Shares issued to a foreign investor must not be priced below fair market value determined by a SEBI-registered merchant banker or a CA using a recognised method (DCF or NAV) as required under Regulation 21 of FEMA (NDI) Rules, 2019. For listed companies, SEBI ICDR pricing norms apply instead. A valuation certificate must be preserved and submitted with Form FC-GPR.