Rationalization of Overseas Investment Norms

 

This Regulatory Alert summarizes the circulars no. A.P.(DIR Series) Circular No. 23 & A.P.(DIR Series) Circular No. 24 issued by the Reserve Bank of India on 14 August 2013 amending the investment conditions prescribed under the Overseas Direct Investment Regulations and Liberalized Remittance Scheme.

These latest measures taken by the Central Bank are intended to arrest the declining Indian currency by curbing the outflow of foreign exchange. The reduction in investment limit for outbound investment would restrict Indian company’s overseas expansion plan and will also impact Merger & Acquisition activities of the Indian companies overseas. Further, by permitting the individuals within LRS limit to invest under the ODI scheme has given flexibility to Individuals to invest abroad at the same time it has also ensured that individuals comply with the ODI guidelines and reporting requirements which will help RBI to monitor these investments.