A.P. (DIR Series) (2001-2002) Circular No. 27, dated 2-3-2002
Attention
of authorised dealers is invited to Foreign Exchange Management (Transfer or
Issue of any Foreign Security) Regulations, 2000 notified by the Reserve Bank vide
Notification No. FEMA 19/RB-2000 dated May 3, 2000 and amended from time to
time.
2. With a
view to further liberalising and broadbasing the policy on overseas direct
investment by Indian parties, the Reserve Bank has, vide Notification
No. FEMA 53/2002-RB dated March 1, 2002 further amended the said Regulations.
The salient features of the amendments are as under :
i. Under
the Automatic Route as per Regulation 6 of the Notification No. FEMA 19 dated
May 3, 2000, Indian parties may now invest in JV/WOS outside India, an amount
not exceeding US $ 100 mn. or its equivalent in a financial year as against the
existing limit of US $ 50 mn. in a financial year.
ii. As
per the existing provisions of Notification No. 19, investment under the
automatic route as per Regulation 6 may be funded by drawal of foreign exchange
from an authorised dealer not exceeding 25% of the net worth of the Indian
party as on the date of last audited balance sheet. This limit has now been
raised to 50% of the net worth.
3. Authorised
dealers may bring the contents of this circular to the notice of their
constituents concerned.
4. The
directions contained in this circular have been issued under section 10(4) and
section 11(1) of the Foreign Exchange Management Act, 1999 (42 of 1999).