Investment rules relating to non-resident Indians eased

India’s cabinet on 21 May approved amendments to the foreign direct investment (FDI) policy to: (i) expand the definition of “non-resident Indians” (NRIs) to include Overseas Citizen of India cardholders (OCIs) and Person of Indian Origin cardholders (PIOs); and (ii) treat all investments by NRIs under schedule 4 of the Foreign Exchange Management (Transfer or Issue of Security by a Person Resident Outside India) Regulations, 2000 (TISPRO), i.e. investments made on a non-repatriable basis, as domestic investments, at par with investments by residents.

The amendments were notified through Press Note 7 of 2015 and became effective from 18 June.

The FDI policy, and the rules and regulations framed under the Foreign Exchange Management Act, 1999 (FEMA), defined NRI as an individual resident outside India who is a citizen of India or a person of Indian origin. The definition as contained in the FDI policy has now been amended to: “an individual resident outside India who is a citizen of India or is an ‘Overseas Citizen of India’ cardholder within the meaning of Section 7(A) of the Citizenship Act, 1955. ‘Persons of Indian Origin’ cardholders registered as such … are deemed to be ‘Overseas Citizen of India’ cardholders”.

Luthra & Luthra Law Offices is a full-service law firm with offices in Delhi, Mumbai, Bangalore and Hyderabad. Shinoj Koshy is a partner and and Neha Sinha is a senior associate at the firm. This article is intended for general informational purposes only and is not a substitute for legal advice.