What is Automatic Route for Foreign Direct Investment in India?
Under the Automatic Route for Foreign Direct Investment in India, Indian companies engaged in all industries except for certain select industries / sectors may issue shares to foreign investors up to 100% of their paid up capital in Indian companies. Any investment in a company that is engaged in an activity in the sectors listed in Annexure A needs specific approval of Government of India. Annexure A SOME OF THE activities or for which automatic route of Reserve Bank, for Investment from Persons Resident Outside India is not available • Banking • NBFCs activities in Financial Services Sector • Housing & Real Estate Development sector for investment from persons other than NRIs/OCBs. • Venture Capital Fund & Venture Capital Company • Investing companies in Infrastructure & Service Sector Annexure B There are also some areas where though Automatic Route is available, foreign investors cannot invest beyond a certain percentage of the paid up capital of the Indian companies or where inves
