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Vide Press Note 4 (2001 Series), investment by Non-resident Indians (NRI) made in foreign exchange on non-repatriable basis was allowed to be made fully repatriable whereas investment made in Indian rupees through rupee account continued to remain non-repatriable.
Proposals for conversion of NRI investment into repatriable equity are hitherto being considered by the Foreign Investment Promotion Board (FIPB) for approval. This procedure has been reviewed in the context of various liberalisation measures taken by the Government in the recent past.
The Department of Industrial Policy & Promotion (DIPP), Ministry of Commerce & Industry, have now issued Press Note 4 (2005 Series) dated 31st August, 2005 which clarifies that in terms of Press Note 4 (2001 series), all proposals would qualify for conversion of non-repatriable equity into repatriable equity under the automatic route provided:
(a) the original investment by the NRI was made in foreign exchange under the FDI Scheme (Schedule I of FEMA Regulations 20/2000 dated 3.5.2000); and
(b) the sector/activity in which the investment is proposed to be converted into repatriable equity is on the automatic route for FDI.
SB/MRS
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