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ARTICLE · 11 APRIL 2025

Updates To The Master Direction On Foreign Investment In India

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The Reserve Bank of India ("RBI") has introduced updates to the Master Direction – Foreign Investment in India (FED Master Direction No.11/2017-18) on January 20, 2025 ("Updated Master Directions").

IndiaGovernment, Public Sector
Archana Tewary
Archana Tewary
Naveen Kumar
Naveen Kumar
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The Reserve Bank of India ("RBI") has introduced updates to the Master Direction – Foreign Investment in India (FED Master Direction No.11/2017-18) on January 20, 2025 ("Updated Master Directions"). The master directions supplement the Foreign Exchange Management (Non-Debt Instruments) Rules, 2019 ("FEM NDI Rules") and the Foreign Exchange Management (Mode of Payment and Reporting of Non-Debt Instruments) Regulations, 2019.

The Updated Master Directions, inter alia, have provided the following key clarifications:

  1. Extension of pricing guidelines to unsubscribed portion of rights issue

The FEM NDI Rules lay down detailed pricing guidelines applicable to various modes of issuance/transfer between residents and non-residents. In relation to rights issue by an unlisted Indian company, Rule 7 of the FEM NDI Rules provides that the price should not be less than the price offered to resident shareholders.

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