Executive Summary:
This document outlines amendments to the Foreign Exchange Management Transfer or Issue of Security by a Person Resident outside India Regulations, 2017. It addresses foreign investment in Indian companies, particularly concerning Non-Banking Financial Companies, Air India, real estate broking services and single-brand retail trading. The regulations take effect from the date of their publication in the Official Gazette, March 26, 2018.
Key Points / Main Content:
Foreign Investment in Companies:
* Foreign investment in investing companies (not registered as NBFCs or core investment companies) requires prior Government approval.
* Foreign investment in investing companies registered as NBFCs is permitted up to 100% under the automatic route.
* Joint audits are mandated where foreign investors specify an auditor with an international network.
Air Transport Services:
* Scheduled Air Transport Service allows 100% automatic route up to 49%, government route beyond.
* Regional Air Transport Service allows 49% automatic route and up to 100% for NRIs and OCIs.
* Foreign investment in Air India Ltd., including foreign airlines, cannot exceed 49%, with substantial ownership and effective control remaining with Indian Nationals.
Real Estate:
* Real estate broking services are excluded from the definition of real estate business, allowing 100% foreign investment under the automatic route.
Single Brand Retail Trading (SBRT):
* A person resident outside India can undertake single brand product retail trading directly or through a legally tenable agreement.
* SBRT entities can set off incremental sourcing of goods from India for global operations against the 30% mandatory sourcing requirement for the first 5 years.
* Sourcing norms are not applicable for the first three years for entities trading in products with 'state-of-the-art' and 'cutting-edge' technology where local sourcing is not possible.
Other Amendments:
* Handicap replaced with Disability.
* Definition provided for invitro diagnostic device.
* Deletion of certain existing clauses and notes in the principal regulations.
* Conditions updated for the issue of capital instruments to persons resident outside India, including swap of instruments, import of capital goods, and pre-operative expenses.
Impact Analysis:
Foreign Investors:
* Impact: Regulations affect permissible investment routes and conditions in Indian companies, especially NBFCs, Air India and the retail sector.
* Action Required: Evaluate current investment strategies and ensure compliance with the revised norms, particularly regarding approval requirements and sourcing regulations.
Indian Investee Companies (including NBFCs, Air India, Retail Entities):
* Impact: Must comply with new audit requirements, sourcing norms, and adhere to revised definitions and investment limits.
* Action Required: Update internal policies, comply with sourcing guidelines, and ensure adherence to the new joint audit requirements if applicable.
Reserve Bank of India (RBI):
* Impact: Responsible for overseeing and enforcing the amended regulations.
* Action Required: Implement the changes in regulatory oversight and update relevant reporting requirements.
Government of India:
* Impact: Government approval required for investments in certain sectors and companies.
* Action Required: Process applications for investments requiring government approval.
Single Brand Retail Trading Entities:
* Impact: Changes to sourcing norms, particularly regarding incremental sourcing and exemptions for certain technologies.
* Action Required: Revise sourcing strategies to align with the new regulations and prepare for potential committee reviews for technology-related exemptions.
Key Entities Referenced
Foreign Exchange Management Act, 1999: An act of the Parliament of India to make provisions 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.
Reserve Bank of India: The central bank of India, responsible for regulating the banking system and managing the country's currency.
Foreign Exchange Management Transfer or Issue of Security by a Person Resident outside India Regulations, 2017: Regulations pertaining to the transfer or issue of security by individuals residing outside India, as governed by the Foreign Exchange Management Act.
Non-Banking Financial Companies: Financial institutions that provide banking services but do not hold a banking license.
NRI: Non-Resident Indian
OCI: Overseas Citizen of India
Air India Limited: An Indian airline company, formerly state-owned.
NITI Aayog: The National Institution for Transforming India, a policy think tank of the Government of India.
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EXTRAORDINARY
Hkkx II—[k.M 3—mi&[k.M (i)
PART II—Section 3—Sub-section (i)
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PUBLISHED BY AUTHORITY
la- 179] ubZ fnYyh] lkseokj] ekpZ 26] 2018@pS=k 5] 1940
No. 179] NEW DELHI, MONDAY, MARCH 26, 2018/CHAITRA 5, 1940
भभभभााााररररततततीीीीयययय (cid:8)(cid:8)(cid:8)(cid:8)ररररज़ज़ज़ज़वववव (cid:11)(cid:11) (cid:11)(cid:11)बबबबकककक(cid:13)(cid:13)(cid:13)(cid:13)
((((ििििववववददददशशेेशशेे ीीीी मममम(cid:10)(cid:10)ुु(cid:10)(cid:10)ुु ाााा ििििववववभभभभाााागगगग ))))
(क(cid:2)(cid:3)ीय कायाल(cid:8) य)
अअअअििििधधधधससससचचूूचचूू ननननाााा
मुंबई, 26 माच,(cid:4) 2018
सससस..ंं..ंं फफफफेेेेममममाााा 22220000((((आआआआरररर))))((((1111))))////2222000011118888----आआआआररररबबबबीीीी
ििििववववददददेशेशेशेशीीीी मममम(cid:21)(cid:21)ुु(cid:21)(cid:21)ुु ाााा (cid:22)(cid:22)(cid:22)(cid:22)बबबबधधंंधधंं ((((भभभभााााररररतततत सससस ेे ेेबबबबााााहहहहरररर ककककेेेे ििििननननववववााााससससीीीी (cid:29)(cid:29)(cid:29)(cid:29)ककककससससीीीी (cid:30)(cid:30)(cid:30)(cid:30)िििि(cid:31)(cid:31)(cid:31)(cid:31) ाााारररराााा (cid:22)(cid:22)(cid:22)(cid:22)ििििततततभभभभििूूििूू तततत ककककाााा अअअअततंंततंं ररररणणणण अअअअथथथथववववाााा ििििननननगगगगमम(cid:11)(cid:11)मम(cid:11)(cid:11) ))))
((((ससससंशंशंशंशोोोोधधधधनननन)))) ििििववववििििननननययययममममााााववववललललीीीी,,,, 2222000011118888
ससससाााा....ककककाााा....ििििनननन.... 222277779999((((अअअअ))))....————िवदशे ी मु(cid:13)ा (cid:14)बंध अिधिनयम,1999 (1999 का 42) क(cid:25) धारा 6 क(cid:25) उप-धारा (3)
के खंड (बी) और धारा 47 "ारा (cid:14)द# शि$य& का (cid:14)योग करते *ए भारतीय -रज़व(cid:4) बक/ एत0ारा िवदेशी मु(cid:13)ा (cid:14)बधं
(भारत से बाहर के िनवासी 4कसी 5ि$ "ारा (cid:14)ितभूित का अंतरण अथवा िनग(cid:4)म) िविनयमावली, 2017 (4दनांक
07 नवंबर, 2017 क(cid:25) अिधसूचना स.ंफेमा. 20 (आर)/2017-आरबी) (िजसे इसके प@ात ् “मूल िविनयमावली” कहा
गया ह)ै को िनBानसु ार संशोिधत करता ह,ै अथा(cid:4)त:् -
1111.... ससससििंंििंं ))))**** ननननाााामममम औऔऔऔरररर (cid:22)(cid:22)(cid:22)(cid:22)ााााररररंंंंभभभभ
(i) यह िविनयमावली िवदशे ी म(cid:13)ु ा (cid:14)बंध (भारत से बाहर के िनवासी 4कसी 5ि$ "ारा (cid:14)ितभूित का अंतरण
अथवा िनग(cid:4)म) (संशोधन) िविनयमावली, 2018 कहलाएगी ।
(ii) यह िविनयमावली सरकारी राजपD मE उसके (cid:14)काशन क(cid:25) तारीख से लागू होगी।
1796 GI/2018 (1)2 THE GAZETTE OF INDIA : EXTRAORDINARY [PART II—SEC. 3(i)]
2222.... ििििववववििििननननययययमममम 11116666....बबबबीीीी मममम .. ..ससससशशंंशशंं ोोोोधधधधनननन ::::
िविनयम 16. बी म,E
(i) मौजूदा उप-िविनयम 5 को िनBिलिखत से (cid:14)ितGथािपत 4कया जाएगा, अथा(cid:4)त:्
“(5)(ए) -रज़व(cid:4) बक/ के पास गैर-ब/Hकंग िव#ीय कंपनी के Iप मE पंजीकृत न क(cid:25) गई िनवेश कंपिनय& तथा
कोर िनवेश कंपिनय& (सीआईसी), दोन& अLय भारतीय संGथाM क(cid:25) पूंजी मE िनवेश करने क(cid:25) गितिविध म E
िलN होने पर उनमE मE िवदशे ी िनवेश के िलए सरकार का पूवा(cid:4)नुमोदन आवOयक ह।ै ”
(cid:8)(cid:8)(cid:8)(cid:8)टटटट2222पपपपणणणणीीीी :::: भारतीय -रज़व(cid:4) ब/क अिधिनयम, 1934 तथा उसके अंतगत(cid:4) बनाए गए िविनयम& के तहत
एनबीएफ़सी के Iप मE काय(cid:4)रत ऐसी कंपिनय& के िलए िनधा(cid:4)-रत िविनयामक ढांचे के अनुपालन के अित-र$
कोर िनवेश कंपिनय& (CIC) को इन िविनयम& का भी अनपु ालन करना होगा।”
(बी) भारतीय -रज़व(cid:4) ब/क के पास गैर-ब/Hकंग िव#ीय कंपनी के Iप मE पंजीकृत िनवेश कंपिनय& मE 4कया
जाने वाला िनवेश 100% Gवचािलत माग (cid:4) के तहत होगा।
(ii) मौजूदा उप-िविनयम 7 के प@ात ् िनBिलिखत को जोड़ा जाएगा, अथा(cid:4)त:्
“(8) जहां कहV िवदशे ी िनवशे करन े वाला भारत के बाहर का िनवासी 5ि$ भारतीय िनवेश (cid:14)ाNकता(cid:4)
कंपनी क(cid:25) लेखापरीWा 4कसी ऐसे िविशX ऑिडटर/ऑिडट फ़म(cid:4) "ारा करवाने क(cid:25) इ\छा (cid:14)कट करता ह,ै
िजसका अंतररा^ीय नेटवक(cid:4) ह,ै तो ऐसी िनवेश (cid:14)ाNकता(cid:4) कंपनी का ऑिडट संयु$ ऑिडट के Iप मE 4कया
जाएगा, िजसमE कोई एक ऑिडटर ऐसा होगा जो उस नेटवक(cid:4) का िहGसा नहV ह।ै ”
(iii) मौजूदा ‘म संaया 9.3. (ए) को िनBिलिखत से (cid:14)ितGथािपत 4कया जाएगा, अथा(cid:4)त:्
(ए) (i) अनुसिू चत हवाई प-रवहन सेवा/ 100% 49% तक (cid:10) वचािलत
49% (cid:14)ितशत से अिधक के िलए
घरेलू अनुसूिचत हवाई याDी सेवा
सरकारी माग (cid:4)स े
(ii) (cid:14)ादिे शक हवाई प-रवहन सेवा
(NRI एवं OCI के िलए 100% (cid:10) वचािलत)
(iv) ‘म सaं या 9.5 मE, खंड (सी) के प@ात ्िनBिलिखत को जोड़ा जाएगा; अथा(cid:4)त:्
“(डी) उपयु(cid:4)$ शतc के अित-र$ मेसस(cid:4) एयर इंिडया िलिमटेड मE िवदशे ी िनवेश िनBिलिखत शतc के अधीन
ह&गे:
(i) मेसस(cid:4) एयर इंिडया िल. म E िवदशे ी एयरलाइन (एयरलाइन&) "ारा 4कए गए िनवेश सिहत िवदशे ी िनवेश
(cid:14)eयW अथवा परोW Iप मE 49% से अिधक नहV ह&गे।
(ii) मेसस(cid:4) एयर इंिडया िल. का मूल Gवािमeव तथा (cid:14)भावी िनयDं ण भारतीय नाग-रक& के पास बने रहना
जारी रहगे ा।
(v) ‘म सaं या 9.5 मE से -टfपणी (3) को हटा 4दया जाएगा।
(vi) ‘म सaं या 10.2 मE, नोट 6 के प@ात नया नोट-7 जोड़ा जाएगा, अथा(cid:4)त ्
“(7). -रयल इGटेट gोHकंग सवे ा को “-रयल इGटेट कारोबार” क(cid:25) प-रभाषा से बाहर रखा गया ह ै और -रयल
इGटेट gोHकंग सवे ा मE Gवचािलत माग(cid:4) के तहत 100% िवदशे ी िनवेश क(cid:25) अनुमित ह।ै
(vii) ‘म संaया 15.3 मE Gतंभ “(cid:14)वेश माग”(cid:4) मE “ 49% तक Gवचािलत माग(cid:4) स;े 49% से अिधक होने पर
सरकारी माग(cid:4) से ” इन शiद& को “Gवचािलत” शiद से (cid:14)ितGथािपत 4कया जाएगा।
(viii) ‘म सaं या 15.3.1 मE मौजूदा खंड (डी) को िनBिलिखत "ारा (cid:14)ितGथािपत 4कया जाएगा, अथा(cid:4)त:्¹Hkkx IIµ[k.M 3(i)º Hkkjr dk jkti=k % vlk/kj.k 3
“भारत के बाहर के िनवासी 4कसी 5ि$, भले ही वह 4कसी g/ड-िवशेष का मािलक हो अथवा अLयथा, को
दशे मE 4कसी िविशX g/ड का सीधे gड/ के मािलक "ारा अथवा उस gड/ -िवशेष के िलए भारत मE jसंगल gड/
उeपाद खुदरा 5ापार करने वाली 4कसी भारतीय एंटीटी और उस gड/ -िवशेष के मािलक के बीच िनkपा4दत
4कसी िविध-सlमत करार के तहत “jसंगल gड/ ” उeपाद खुदरा 5ापार करने क(cid:25) अनुमित दी जाएगी ।
(ix) ‘म सaं या 15.3.1 के खंड (जी ) तथा खंड (एच) को हटा 4दया जाएगा।
(x) ‘म सaं या 15.3.1 के हटाए गए खंड (एच) के प@ात ् िनBिलिखत को जोड़ा जाएगा, अथा(cid:4)त:्
“(आई) jसगं ल gाडं खदु रा 5ापार करनेवाली सGं था को उसका पहला Gटोर खुलने के वष(cid:4) के 1 अ(cid:14)ैल स े
(cid:14)ारिlभक 5 वष(cid:4) के दौरान वैिnक प-रचलन& के िलए भारत से वGतुM क(cid:25) वृिoशील सोpसqग का भारत स े
30 (cid:14)ितशत खरीद क(cid:25) अिनवाय(cid:4) सोpसqग अपेWा के समW (cid:14)िततुलन करन े क(cid:25) अनमु ित दी जाएगी। इस
(cid:14)योजन के िलए विृ oशील सोpसqग का अथ(cid:4) होगा jसंगल gाडं खुदरा 5ापार करनवे ाली अिनवासी एटं ीटीज़
"ारा (cid:14)eयW अथवा उनक(cid:25) समूह कंपिनय& के माrयम से उस jसंगल gाडं के िलए 4कसी िविशX िव#ीय वष (cid:4)
मE भारत से इस (cid:14)कार क(cid:25) गई वैिशिवक सोpसqग के मूsय (tपये मE) मE उसके पूवव(cid:4) तu िव#ीय वष (cid:4) क(cid:25) तुलना
मE *ई वृिo। 5 वष(cid:4) क(cid:25) इस अविध को पूण(cid:4) करने पर, jसगं ल gांड खुदरा 5ापार(SBRT) करनेवाली कंपनी
को अपने भारत के प-रचालन& के िलए सोpसqग सबं ंधी 30% के मानदडं को सीध े पूण(cid:4) करना होगा और यह
वाvष(cid:4)क आधार पर 4कया जाएगा।”
(xi) ‘म सaं या 15.3.1 मE -टfपणी (2) तथा -टfपणी (3) को हटा 4दया जाएगा।
(xii) ‘म सaं या 15.3.1 मE मौजूदा -टfपणी (5) को िनBिलिखत "ारा (cid:14)ितGथािपत 4कया जाएगा, अथा(cid:4)त:्
"अeयाधुिनक” एवं “उxतम तकनीक" वाले उeपाद&, जहां Gथानीय सोpसqग संभव नहV ह,ै से संबिLधत
एटं ीटीय& के िलए कारोबार क(cid:25) शुtआत स,े अथा(cid:4)त उनके (cid:14)थम Gटोर के (cid:14)ारlभ से तीन वषc क(cid:25) अविध तक
सोpसगq क(cid:25) शतy लागू नहV ह&गी। इसके प@ात ् ऊपरउिsलिखत पैरा 15.3.1 के खंड (ई) मE उिsलिखत शतy
लागू ह&गी। सोpसqग क(cid:25) शतc मE छूट के िलए आवेदक& "ारा 4कए गए दाव& को परखने के िलए औ{ोिगक
नीित एवं सवं ध(cid:4)न िवभाग के सिचव क(cid:25) अrयWता मE एक सिमित का गठन 4कया जाएगा, िजसमE नीित
आयोग, संबिधत (cid:14)शासिनक मंDालय के (cid:14)ितिनिध तथा GवतंD तकनीक(cid:25) िवशेष} शािमल ह&गे। उ$
सिमित इस (cid:14)कार के दाव& के प-र(cid:14)े~य मE उeपाद& के GवIप अथा(cid:4)त उनके "अeयाधुिनक” एवं “उxतम
तकनीक" वाले होन े और इस सबं ंध मE Gथानीय सोpसगq उपलiध न होने के बारे म E जांच करेगी और इस
(cid:14)कार क(cid:25) छूट 4दये जाने सबं धं ी अपनी संGतुितया ँ(cid:14)Gतुत करेगी।”
(xiii) ‘म सaं या 16.3 मE, -टfपणी (2) के खंड (ए) के उप-खंड (एबी) मE मौजूदा शiद “िवकलागं ” के Gथान पर
“4द5ांग” शiद का उपयोग 4कया जाएगा।
(xiv) ‘म सaं या 16.3 मE -टfपणी (2) के खंड (सी) को िनBिलिखत से (cid:14)ितGथािपत 4कया जाएगा:
“कृिDम प-रवेशीय (इन-िव(cid:128)ो) िनदान उपकरण वे उपकरण ह,/ जो जांच के मतं (cid:129)य स,े मानव शरीर अथवा
पशुM से एकD 4कए गए नमून& के परीWण-माrय म क(cid:25) तरह और िच4कeस ीय अथवा िनदान के उ(cid:130)ेO य स े
(cid:14)यु(cid:131) त अिभकम(cid:4)क (reagent), अिभकम(cid:4)क-उeप ाद, (cid:129)य ास मापक (कैिलgेटर), िनयंDण साम(cid:132)ी, 4कट,
उपकरण, उपकरण-समूह, औजार अथवा (cid:14)णाली के Iप मE अकेले अथवा समूह मE के Iप मE (cid:14)योग 4कए
जाते ह।/
(xv) ‘म सaं या 16.3 म,E मौजूदा -टfपणी (3) को हटा 4दया जाएगा।
(xvi) ‘म सaं या एफ़. 6.1 म,E मौजूदा खंड (ए) को हटा 4दया जाएगा।4 THE GAZETTE OF INDIA : EXTRAORDINARY [PART II—SEC. 3(i)]
3333.... अअअअननननससुुससुु चचूूचचूू ीीीी ----1111 मममम ेे ेेससससशशंंशशंं ोोोोधधधधनननन
अनुसूची -1 मE,
(i) मौजूदा पैरा(cid:132)ाफ 1(4), को िनBिलिखत "ारा (cid:14)ितGथािपत 4कया जाएगा, अथा(cid:4)त;्
(4) कोई भारतीय कंपनी केL(cid:13) सरकार और/अथवा भारतीय -रज़व (cid:4) बक/ "ारा समय-समय पर जारी िन(cid:134)दX(cid:4) शतc के
अनुपालन के अधीन, भारत के बाहर के िनवासी 4कसी 5ि$, य4द भारतीय िनवेश (cid:14)ाNकता(cid:4) कंपनी Gवचािलत माग(cid:4)
वाले WेD& मE संल(cid:135) ह,ै को िनBिलिखत के बदले पूंजीगत िलखतE जारी कर सकती ह:ै
(ए) पूंजीगत िलखत& को Gवपै कर के; अथवा
(बी) पूंजीगत माल/मशीनरी/उपकरण (सेकंड हड/ मशीनरी को छोड कर) का आयात कर के ; अथवा
(सी) (cid:14)चालन-पूव(cid:4)/िनगमन-पूव(cid:4) 5य (4कराया आई के भुगतान सिहत)
बशत (cid:136) य4द िनवेश (cid:14)ाNकता (cid:4) कंपनी सरकारी अनुमोदन WेD& मE संल(cid:135) हो, तो सरकार का पूवान(cid:4) ुमोदन (cid:14)ाN करना
होगा। इसके िलए कE(cid:13) सरकार "ारा समय-समय पर यथा-िनधा(cid:4)-रत तरीके से आवेदन करना होगा।
(ii) मौजूदा पैरा 1(6) को हटा 4दया गया ह।ै
[फा. सं. 1/22/ईएम/2016]
शेखर भटनागर, (cid:14)भारी मुaय महा(cid:14)बंधक
पपपपाााादददद (cid:8)(cid:8)(cid:8)(cid:8)टटटट2222पपपपणणणणीीीी :::: मूल िविनयमावली 4दनांक 7 नवlबर 2017 के जी.एस.आर.सं.1374(अ) "ारा भारत सरकार के
सरकारी राजपD के भाग II, खंड-3, उप-खंड(i) मE (cid:14)कािशत क(cid:25) गई थी।
RESERVE BANK OF INDIA
(Foreign Exchange Department)
(CENTRAL OFFICE)
NOTIFICATION
Mumbai, the 26th March, 2018
No. FEMA.20(R) (1)/2018-RB
Foreign Exchange Management (Transfer or Issue of Security by a Person Resident outside India) (Amendment)
Regulations, 2018
G.S.R. 279(E).—In exercise of the powers conferred by clause (b) of sub-section (3) of Section 6 and Section
47 of the Foreign Exchange Management Act, 1999 (42 of 1999), the Reserve Bank of India hereby makes the following
amendments to the Foreign Exchange Management (Transfer or issue of Security by a Person Resident outside India)
Regulations, 2017 (Notification No. FEMA. 20 (R)/2017-RB dated November 07, 2017) (hereinafter referred to as 'the
Principal Regulations'), namely:-
1. Short Title & Commencement
(i) These Regulations may be called the Foreign Exchange Management (Transfer or Issue of Security by a Person
Resident outside India) (Amendment) Regulations, 2018.
(ii) They shall come into force from the date of their publication in the Official Gazette.
2. Amendment to Regulation 16.B
In Regulation 16.B,
(i) The existing sub-regulation 5, shall be substituted by the following namely:
“(5) (a) Foreign Investment in investing companies not registered as Non-Banking Financial Companies with the
Reserve Bank and in core investment companies (CICs), both engaged in the activity of investing in the capital of
other Indian entities, will require prior Government approval.¹Hkkx IIµ[k.M 3(i)º Hkkjr dk jkti=k % vlk/kj.k 5
Note: Compliance to these Regulations by the core investment companies is in addition to the compliance of the
regulatory framework prescribed to such companies as NBFCs under the Reserve Bank of India Act, 1934 and
regulations framed thereunder.
(b) Foreign investment in investing companies registered as Non-Banking Financial Companies (NBFCs) with
the Reserve Bank, will be under 100% automatic route.
(ii) After the existing sub-regulation 7, the following shall be inserted namely,
“(8) Wherever the person resident outside India who has made foreign investment specifies a particular auditor/
audit firm having international network for the audit of the Indian investee company, then audit of such investee
company shall be carried out as joint audit wherein one of the auditors is not part of the same network.”
(iii) The existing SL. No 9.3(a) shall be substituted by the following, namely:
(a) (i) Scheduled Air Transport Service/ 100% Automatic up to 49%
Domestic Scheduled Passenger Airline Government route beyond
(ii) Regional Air Transport Service 49%
(Automatic up to 100% for
NRIs and OCIs)
(iv) In SL.No 9.5, after clause (c), the following shall be inserted, namely:
“(d) In addition to the above conditions, foreign investment in M/s Air India Limited shall be subject to the
following conditions:
(i) Foreign investment in M/s Air India Ltd., including that of foreign airline(s), shall not exceed 49%
either directly or indirectly.
(ii) Substantial ownership and effective control of M/s Air India Ltd. shall continue to be vested in
Indian Nationals.”
(v) In SL.No 9.5, Note (3) shall be deleted.
(vi) In SL. No 10.2, after Note 6, a new Note 7 shall be inserted, namely:
“(7) Real estate broking services shall be excluded from the definition of “real estate business” and 100%
foreign investment is allowed in real estate broking services under automatic route.”
(vii) In SL.No 15.3, under the column Entry route, the words, “Automatic up to 49%; Government route beyond 49%”
shall be substituted by the words “Automatic”.
(viii) In SL.No 15.3.1, the existing clause (d) shall be substituted by the following, namely:
“A person resident outside India, whether owner of the brand or otherwise, shall be permitted to undertake
‘single brand’ product retail trading in the country for the specific brand, either directly by the brand owner or
through a legally tenable agreement executed between the Indian entity undertaking single brand retail trading
and the brand owner.”
(ix) In SL.No 15.3.1, clause (g) and clause (h) shall be deleted.
(x) In SL.No 15.3.1, after the omitted clause (h), the following shall be inserted, namely
“(i) Single brand retail trading entity shall be permitted to set off its incremental sourcing of goods from India
for global operations during initial 5 years, beginning 1st April of the year of the opening of first store, against
the mandatory sourcing requirement of 30% of purchases from India. For this purpose, incremental sourcing
shall mean the increase in terms of value of such global sourcing from India for that single brand (in INR terms)
in a particular financial year from India over the preceding financial year, by the non-resident entities
undertaking single brand retail trading, either directly or through their group companies. After completion of
this 5 years period, the SBRT entity shall be required to meet the 30% sourcing norms directly towards its
India’s operation, on an annual basis.”
(xi) In SL.No 15.3.1, Note 2 and Note 3 shall be deleted.
(xii) In SL.No 15.3.1, the existing Note 5 shall be substituted by the following, namely:
“Sourcing norms will not be applicable up to three years from commencement of the business i.e. opening of the
first store for entities undertaking single brand retail trading of products having 'state-of-art' and 'cutting-edge'
technology and where local sourcing is not possible. Thereafter, condition mentioned at 15.3.1(e) above will be
applicable. A Committee under the Chairmanship of Secretary, DIPP, with representatives from NITI Aayog,6 THE GAZETTE OF INDIA : EXTRAORDINARY [PART II—SEC. 3(i)]
concerned Administrative Ministry and independent technical expert(s) on the subject will examine the claim of
applicants on the issue of the products being in the nature of ‘state-of-art’ and ‘cutting-edge’ technology where
local sourcing is not possible and give recommendations for such relaxation.”
(xiii) In SL.No 16.3, in Note 2, in clause (a), in sub-clause (ab), the existing word “handicap” shall be substituted by the
word, “disability”.
(xiv) In SL.No 16.3, in Note 2, clause (c) shall be substituted by the following, namely:
“in-vitro diagnostic device which is a reagent, reagent product, calibrator, control material, kit, instrument,
apparatus, equipment or system, whether used alone or in combination thereof intended to be used for
examination and providing information for medical or diagnostic purposes by means of examination of
specimens derived from the human bodies or animals.”
(xv) In SL.No 16.3, the existing Note 3 shall be deleted.
(xvi) In SL.No F.6.1, the existing clause (a) shall be deleted.
3. Amendment to Schedule 1
In Schedule 1,
(i) The existing Para 1 (4), shall be substituted by the following namely:
(4) An Indian company may issue, subject to compliance with the conditions prescribed by the Central Government
and/or the Reserve Bank from time to time, capital instruments to a person resident outside India, if the Indian
investee company is engaged in an automatic route sector, against:
(a) Swap of capital instruments; or
(b) Import of capital goods/ machinery/ equipment (excluding second-hand machinery); or
(c) Pre-operative/ pre-incorporation expenses (including payments of rent etc.).
Provided Government approval shall be obtained if the Indian investee company is engaged in a sector under
Government route. The applications for approval shall be made in the manner prescribed by the Central
Government from time to time.
(ii) The existing Para 1 (6), shall be deleted:
[F.No. 1/22/EM/2016]
SHEKHAR BHATNAGAR, Chief General Manager-in-Charge
Foot Note:—The Principal Regulations were published in the Official Gazette vide G.S.R. No. 1374(E), dated
November 07, 2017 in Part II, Section 3, Sub-section (i).
Uploaded by Dte. of Printing at Government of India Press, Ring Road, Mayapuri, New Delhi-110064
and Published by the Controller of Publications, Delhi-110054.