Amendment in the Limit of ODI (FEMA 1999)

Reduction in limit of Overseas Direct Investment

The limit of ODI by the Indian party in the overseas JV/WOS has been reduced to 100% net worth under Automatic Route from the existing limit of 400% of net worth.

The existing limit of 400 % of the net worth of the Indian company, investing in the overseas unincorporated entities in the energy and natural resources sectors under the automatic route has been reduced to 100 % of the net worth of the Indian company investing in the overseas unincorporated entities in the energy and natural resources sectors, as on the date of last audited balance sheet;

ODI in excess of 100% of the net worth shall be considered under Approval route of RBI.

In respect of the Navaratna Public Sector Undertakings (PSUs), ONGC Videsh Limited (OVL) and Oil India Ltd (OIL), the extant provision for investing in overseas unincorporated entities and the overseas incorporated entities in the oil sector (i.e., for exploration and drilling for oil and natural gas, etc.), which are duly approved by the Government of India, without any limits under the automatic route, would however continue as hitherto.

The above provisions shall come into effect with immediate effect and would apply to all fresh Overseas Direct Investment proposals on a prospective basis but would not apply to the existing JV/WOS set up under the extant regulations

Refer: Circular No.23 dated 14.08.2013