What are the circumstances when the Automatic Route is not available?
Foreign investors have to, however, keep in mind that they may invest freely under the Automatic Route described above but where such investment does not conform to policies of Government of India, a specific approval from Government must be sought. For example, there are Government guidelines on location of industrial units, or there are certain items like explosives or liquor that need an industrial licence. If the Indian company does not conform to the locational guidelines or needs an Industrial licence then it cannot issue shares under the Automatic Route. Automatic Route is also not available to those foreign investors who already have a financial or technical collaboration in the same or allied field or where more than 24% foreign investment is made in a company which is engaged in manufacture of an item reserved for small scale industry. Finally, Sri Lankan nationals and investors from Pakistan & Bangladesh need to apply to Government of India for investing in Indian companies.
Related Questions
- Other than issue of shares under Automatic /Government Route, what other general permissions are available under Notification No.FEMA 20 dated 3-5-2000?
- What are the payment parameters for foreign technology transfer under the Automatic Route of Reserve Bank of India? How should royalty be calculated?
- What are the circumstances when the Automatic Route is not available?
