ARTICLE · 12 OCTOBER 2015

Composite Caps For Foreign Investment

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The Government of India has recently issued a Press note to do away with the distinction between different types of foreign investments, especially between foreign portfolio investments and foreign direct investments, and replace them with composite caps.

IndiaGovernment, Public Sector

Vaishakh Kapadia

Shatakshi Komal

The Government of India has recently issued a Press note to do away with the distinction between different types of foreign investments, especially between foreign portfolio investments and foreign direct investments, and replace them with composite caps.

Some of the key points of the Press Note are as follows -

1. It is clarified that foreign investment (direct or indirect) shall include all types of foreign investments, irrespective of whether the said investments have been made under Schedule 1 (Foreign Direct investment), 2 (Foreign Institutional Investor), 2A (Foreign Portfolio Investor), 3 (Non-resident Indian), 6 (Foreign Venture Capital Investor), 8 (Qualified Foreign Investor), 9 (Limited Liability Partnership) and 10 (Depository Receipts) of FEMA (Transfer or Issue of Security by Persons Resident Outside India) Regulations ("Regulations"). Hence, sectoral caps would include foreign investments via all these routes.

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