This Regulatory Alert summarizes a recent A.P. (DIR Series) Circular No.1, dated July 03, 2014 issued by the Reserve Bank of India (RBI) restoring the earlier limit of 400% of net worth for making investment outside India under automatic route allowed under the Overseas Direct Investment scheme.
Due to the reduction in the investment limit, many Indian companies were facing challenges in expanding/ running their overseas operations. Also, RBI was facing challenges in processing applications under the approval route which had multiplied post reduction of limits as there were number of companies desirous of making investments beyond 100% of net-worth criteria. With the above restoration, Indian companies will now have the flexibility in funding/ operating their overseas operations
Due to the reduction in the investment limit, many Indian companies were facing challenges in expanding/ running their overseas operations. Also, RBI was facing challenges in processing applications under the approval route which had multiplied post reduction of limits as there were number of companies desirous of making investments beyond 100% of net-worth criteria. With the above restoration, Indian companies will now have the flexibility in funding/ operating their overseas operations
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