Corporate Law Group

Being a signatory of International Agreements like GATT, GATS, TRIPs etc., India has opened up its various industry sectors to foreign investment. At present, India’s Foreign Direct Investment Policy provides for two different Entry Routing Models – (i) Automatic Route and (ii) Foreign Investment Promotion Board (“FIPB”) Route.

Under automatic route, investors are only required to notify the Regional office concerned of the RBI within 30 days of receipt of inward remittances and file the required documents with that office within 30 days of issuance of shares to foreign investors. Under this Route, upto 100% FDI is allowed and this route is available for all sectors except for (i) manufacture of cigars or cigarettes of tobacco and manufactured tobacco substitutes, , (ii) manufacture of Electronic Aerospace and Defence Equipments (all types), (iii) manufacture of items exclusively reserved for small scale sector with more than 24% FDI, (iv) proposals in which a foreign collaborator has an existing financial/technical collaboration in India in the same filed, (v) proposals falling outside notified sectoral policy/caps or under sectors in which FDI is not permitted.

FIPB route is available for sectors and activities not covered under the automatic route. This mode involves making an Application to the Foreign Investment Promotion Board, Government of India and only after acceptance of such an Application, investment can be made.

For sectors where 100% foreign investment is allowed, foreign companies are allowed to establish 100% subsidiary companies, whereas for other sectors, foreign companies can enter into a Joint Venture arrangement with an Indian company.

Due Diligence on Entry Routing
‘Risk Analysis’ and ‘Alternative Strategies’ studies for Entry Routing
Preparing and customizing Comprehensive Entry Routing Plans for Clients’ specific requirements
Facilitating Automatic Route investment in various sectors
Drafting, vetting and filing Applications before the Foreign Investment Promotion Board
Professional services for obtaining various statutory clearances for entering and operating in India
Interacting with Regulatory Authorities like the Reserve Bank of India (RBI), the Foreign Investment of Promotion Board (FIPB), the Insurance Regulatory and Development Authority of India (IRDA), the office of the Director General of Foreign Trade (DGFT) etc.

By working in an integrated manner, CLG ensures that ‘Entry Routing’ issues are addressed from all possible angles, regardless of the size or complexity involved. CLG has drafted a number of FIPB Applications, obtained FIPB, RBI and other regulatory clearances/approvals for its multi-national Clients.