The government in consultation with the RBI undertook a comprehensive exercise to simplify overseas investment rules. In view of the evolving needs of businesses in India, in an increasingly integrated global market, there is a need for Indian corporations to be part of the global value chain. The revised regulatory framework for overseas investment provides for simplification of the existing framework for overseas investment and has been aligned with the current business and economic dynamics.

Here are some of the amendments under the overseas investment rule-

1. Clarity on Overseas Direct Investment and Overseas Portfolio Investment has been brought in and various overseas investment related transactions that were earlier under approval route are now under automatic route.
2. Moreover, the ’round-tripping’ rules has also been eased by allowing Indian entities to invest in foreign companies that may route this investment back into India provided certain transparency conditions are met.
3. Any Indian resident whose account is classified as non-performing assets, or as a wilful defaulter by any bank, or is under investigation by a financial service regulator – will have to obtain a ‘No Objection Certificate’ from the lender bank or regulatory body or investigative agency before making any financial commitment or undertaking disinvestment.
4. Any ODI in start-ups, recognised under the laws of the host country, could be made by an Indian entity only from the internal accruals whether from the Indian entity or group or associate companies in India and in the case of resident individuals, from the own funds of such an individual.
5. If a person resident in India responsible for submitting evidence or making filings fails to do so within specified time, can make submissions with the late submission fee within such period and at the rate as RBI may direct. Provided such facility can be availed within a maximum period of 3 years from the due date of submission or filing as the case may be.