FDI in India

Foreign Direct Investment in India

Usually, business organizations are a bit sceptical about their initial business decisions and remain conservative while committing to any investment plan in a new geography. Business in a foreign territory always brings a certain level of uncertainties and apprehensions and a prudent entrepreneur would test the waters before he jumps in.

The investment climate in India has improved considerably since the opening up of the economy in 1991. With a focus on the Ease of Doing Business in India, consistent efforts by successive governments have transformed India from a “highly regulated economy” to “one of the most vibrant and liberalized economies”. Now, India is a captivating investment destination underpinned by democratic values and driven forward by abundant human talent, massive markets, enormous growth potential and endless opportunities..

India netted record FDI inflows in the past two decades. As per official FDI data published by DPIIT, India received the cumulative amount of FDI worth US$ 681 Billion between April, 2000 to March, 2020. At one point, India became the top FDI destination in the world overtaking economic giants like the United States of America and China.

In 2018-19, India received FDI worth US$ 42 Billion which increased @ 16% annual growth to US$ 49 Billion in 2019-20 bettering the FDI inflows to developed economies like Germany and Canada.

Quick Insights on FDI in India

FDI under Automatic Route:

For specified sectors in which foreign investment is allowed under Automatic Route, non-resident investors do not require any approval from Government of India for permitted level of investment.

FDI under Government Route or Approval Route:

For regulated sectors in which foreign investment is allowed under Government Route or Approval Route, investors are required to obtain prior approval from the Government of India for permitted level of investment in specified sectors. Upon receipt of applications through FIFP, concerned administrative ministries / departments are entrusted for processing approval applications.

Far far away, behind the word mountains, far from the countries Vokalia and Consonantia, there live the blind texts. Separated they live in Bookmarksgrove right at the coast

  • Opening of bank account in India
  • Remittance of Paid-up Capital amount into India bank account
  • Board Meeting
  • Allotment of Shares
  • FIRC (Foreign Inward Remittance Certificate) from Bank
  • Declaration by the Authorised Representative of the Indian Company
  • Shareholding pattern in the Indian company (Pre and post allotment of shares)
  • Copy of government approval (if applicable)
  • Copy of order of NCLT approving Scheme of Amalgamation (Merger/ D-merger)
  • Certificate from a Company Secretary certifying compliance of FEMA regulations in relation to acceptance investment from foreign investors
  • Certificate from Statutory Auditors / a Chartered Accountant / a Merchant Banker certifying the manner of arriving at the price of the shares issued to foreign investors
  • Copy of relevant RBI approval (if applicable)
  • KYC documents
  • Board Resolution
  • Registration of Business User at RBI portal
  • Registration of Entity User at RBI portal
  • Filing of FC-GPR (Foreign Currency – Gross Provisional Return) at RBI portal

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