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How does a foreign company invest in India?

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George George
Answered on December 05,2019

Foreign companies can invest in India either through:- 

  1. Automatic Approval - by the country's Central Bank, the Reserve Bank of India (RBI), Mumbai, or
  2. Through the Foreign Investment Promotion Board (FIPB)
    1. Automatic Approval through Reserve Bank of India is available for all items/activities except a few as given in the Press Note No.2(2000 series) dated 11.2.2000. The sector specific guidelines in this regard are given in Annexure IV of the Manual on Industrial Policy & Procedures in India.No prior approval required. The company is only required to report to RBI within 30 days of receipt of foreign equity/allotment of shares
    2. FIPB approval is required for all other proposals not eligible for Automatic Approval.

Applications to be submitted in Form IL-FC or on plain paper with full details to the Secretariat for Industrial Assistance (SIA) for the cases involving NRI/OCB investment and 100% EOU. For remaining cases, the applications may be submitted to Department of Economic Affairs, Ministry of Finance. The proposals are considered by the reconstituted FIPB in the Department of Economic Affairs. IL-FC Form is available at Website in a downloadable format on the DIPP Website.

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