Global Trade Alert

On 14 August 2013, the Reserve Bank of India (RBI) reduced the threshold amount of outward foreign direct investments of an Indian party in joint ventures (JV) and/or wholly owned susidiaries (WOS) not requiring prior approval from the RBI. This threshold amount was reduced from 400% to 100% of the net worth of the Indian party. If the investment exceeds this limit an approval is required from the RBI. The provision only applies to FDI proposals submitted after the inception date.
 
For the purpose of this regulation, net worth is defined as the paid up capital and free reserves of the company/companies incorporated in India making the investment.