Handbook For NRI

Ministry of Overseas
Indian Affairs
FOR OVERSEAS INDIANS
HANDBOOK
R; t r l eso ; s
i
HAMDBCCK
ICB
CVEBSEAS IMDIAMS
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JLis book Las been compiled/summarised lrom inlormation available in ollicial documents/circulars/
websites ol tLe Covt. ol India, RBI, inlormation received lrom various States and otLer reliable sources.
Every possible care Las been taken to provide current and autLentic inlormation. JLis Handbook lor
Cverseas Indians is intended to serve as a guide to tLem and does not purport to be a legal document. In
case ol any variation between wLat Las been stated in tLis Handbook and tLe relevant Act, Rules,
Regulations, Policy Statements etc., tLe latter sLall prevail.
iii
ICBEWCBD
I am glad to introduce tLis book "Handbook lor Cverseas
Indians". JLis book will oller a picture ol investment
opportunities and entrepreneurial activities in India.
I am sure tLis Handbook will lacilitate greater understanding ol
tLe environs and Lelp Cverseas Indians to work, invest and
llourisL in tLeir own country.
(VAYALAB BAVI)
Minister ol Cverseas Indian Allairs
Vayalar Bavi Ministry ot Cvcrscas
Indian Attairs
-a u
iv
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PBEIACE
An important service tLat tLe Ministry ol Cverseas Indian Allairs
is striving to extend to tLe Cverseas Indians is tLat ol investment
services to enable potential Cverseas Indian Investors to benelit
lrom India`s rapidly growing economy. As a lirst step we are
bringing out tLis Handbook lor Cverseas Indians in wLicL we
Lave attempted to compile tLe relevant inlormation wLicL an
Cverseas Indian may require in Lis initial ellorts to establisL Lis
business ties witL India. JLe Handbook contains tLe latest
inlormation and Las been updated till ovember 2006 by bringing
important but otLerwise scattered inlormation lrom tLe latest
press notes, RBI master circulars, Economic Survey, IDI, Ioreign
Direct Investment Policy, Manual ol DIPP, etc. at one place.
JLe language ol tLe book Las been simplilied by summarizing
tLe tecLnicalities and details ol rules lor tLe compreLension ol
tLe general Cverseas Indian. Any person wLo would like to go
into detail on tLe topics included in tLe Handbook may like to
read tLis book along witL tLe Compendium on Policies,
Incentives and Cpportunities lor Cverseas Indians wLicL is also
being publisLed by tLe Ministry ol Cverseas Indian Allairs
(MCIA) alongwitL tLe Handbook.We would welcome suggestions
lor improving tLis book in tLe next edition.
ABOUT THE MINISTRY
JLe Indian Diaspora constitutes a signilicant economic, social and cultural lorce in tLe world.
Cverseas Indians estimated at over twenty million are spread across 110 countries. JLeir industry,
enterprise, economic strengtL, education and prolessional skills are widely recognised. JLe
bond wLicL Lolds tLis vast and diverse overseas Indian community togetLer witL India is
Indianness. JLe creation ol tLe Ministry ol Cverseas Indian Allairs (MCIA) acknowledges tLe
lact tLat tLe wellare ol Cverseas Indians needs mainstream attention. JLe mission ol tLe Ministry
is to promote, nurture and sustain a mutually benelicial and symbiotic relationsLip between
India and its diaspora.
JLe Leterogeneous Indian diaspora spread across eigLt major regions ol tLe world is a
product ol dillerent waves ol migration over Lundreds ol years and Lave distinct
expectations lrom tLe Lome country. In lacilitating tLe process ol engagement tLe Ministry
seeks to provide lor tLis wide range ol roles and expectations.
JLe ministry also recognizes tLat tLe various States are important players in our Lnion
ol States. Equally, tLey are central to sustainable and mutually benelicial engagement
between India and its diaspora. It must be recognized tLat any initiative tLat Cverseas
Indians, individually or collectively, take must be ancLored in one ol tLe States. JLe States
are tLerelore encouraged to develop a stake in tLe entire process ol engagement witL tLe
diaspora and become natural stakeLolder partners.
JLe Ministry ol Cverseas Indian Allairs is a young ministry. Initially establisLed in May
200+ as tLe Ministry ol on-Resident Indian Allairs` it was renamed as 'Ministry ol
Cverseas Indian Allairs` (MCIA) in September 200+. JLe emigration division ol
tLe Ministry ol Labour and Employment was attacLed to tLe new Ministry in
December 200+. JLe RI division ol tLe Ministry ol External Allairs (MEA) provides
support to tLe MCIA and now lunctions as tLe Diaspora division in tLe Ministry.
JLe Ministry is Leaded by a cabinet minister and is organized into lour lunctional service
divisions: Diaspora Services, Iinancial Services, Employment Services, and Social Services. A
small team ol eleven ollicers (Deputy Secretary and above) is working in tLe Ministry in a
delayered and multi-task mode.
JLe Protector Ceneral ol Emigrants administers tLe Emigration Act, 1983. He oversees tLe
eigLt lield ollices ol tLe protectors ol emigrants located at CLandigarL, CLennai, CocLin, DelLi,
Hyderabad, Kolkata, Mumbai and JLiruvanantLapuram.
INDEX
PABTICLLABS
Dctinitions
1. Introduction 1
1.1 Cverview ol India`s Economy 3
1.2 Business Environment in India 5
1.3 Incentives and Concessions lor RIs/CIs 6
2. IDI/MBI Invcstmcnt in India 9
2.1 Policy on IDI/RI Investment 11
2.2 Procedures 12
2.3 Entry Cptions lor Investors 16
2.+ Special Economic Zones (SEZs) 19
2.5 Business Cpportunities in various States 25
3. Tax Inccntivcs tor MBIs 33
4. Cthcr Invcstmcnt Cpportunitics in India 39
+.1 SLares and Securities +1
+.2 Loans & Cverdralts +3
+.3 Immovable Property +5
+.+ Remittance Iacilities lor RIs/PICs +/
+.5 PLilantLropy by CCs +8
5. Cthcr Important Mattcrs 53
5.1 Cverseas CitizensLip ol India 55
5.2 PIC Card 61
5.3 CtLer Important ScLemes ol tLe Ministry 6/
5.+ Baggage Rules & Visa Rules /1
5.5 Irequently Asked Questions /6
5.6 List ol Important Websites 81
Contact dctails 83
Anncxurcs 85
Annexures I-VIII 8/-106
Iccdback Iorm 107
DEFINITIONS
Who is an Overseas Citizen of India (OCI)?
A loreign national, wLo was eligible to become a citizen ol India on 26.01.1950 or was a citizen ol
India on or at any time alter 26.01.1950 or belonged to a territory tLat became part ol India alter
15.08.19+/ and Lis/Ler cLildren and grand cLildren, is eligible lor registration as an Cverseas
Citizen ol India (CCI). Minor cLildren ol sucL person are also eligible lor CCI. However, il
tLe applicant Lad ever been a citizen ol Pakistan or BangladesL Le/sLe will not be eligible lor
CCI.
Who is a Non Resident Indian?
Section 2 ol tLe Ioreign ExcLange Management Act, 1999 (IEMA) deals witL various
delinitions. It delines a person resident in India and a person resident outside India. However,
it does not deline tLe term non-resident nor it does deline tLe term on Resident Indian
(RI).
However, otilication o. 5/2000-RB (dealing witL various kinds ol Bank Accounts) delines
tLe term on Resident Indian (RI) to mean a person resident outside India wLo is eitLer a
citizen ol India or is a person ol Indian origin. In sLort, tLe delinition ol tLe term RI is
contextual and can Lave sligLtly dillerent connotations lor IEMA/Income Jax/Acquisition
ol Immovable Property etc.
Who is a person resident in India?
Lnder tLe IEMA, a person resident in India means a person residing in India lor more tLan 182
days during tLe course ol tLe preceding linancial year and wLo Las come to or stays in India
eitLer lor taking up employment, carrying on business or vocation in India or lor any otLer
purpose, tLat would indicate Lis intention to stay in India lor an uncertain period. In otLer
words, to be treated as 'a person resident in India` under IEMA a person Las not only to satisly
tLe condition ol tLe period ol stay (being more tLan 182 days during tLe course ol tLe preceding
linancial year) but Las to comply witL tLe condition ol purpose/ intention ol stay.(Ior details
see IEMA, 1999).
DETEBMIMATICM CI BESIDEMTIAL STATLS CI AM ASSESSEE LMDEB THE IMCCME TAX ACT
Who is a Person of Indian Origin (PIO)?
1. For the purposes of availing of the facilities of opening and maintenance of
bank accounts and investments in shares/securities in India;
Person ol Indian Crigin means any person:
a) wLo at any time, Leld an Indian passport, or
b) Le/sLe or eitLer ol Lis/Ler parents or Lis/Ler grandparents was a citizen ol India by virtue
ol tLe Constitution ol India or tLe CitizensLip Act, 1955(5/ ol 1955) or
c) tLe person is a spouse ol an Indian citizen or a person relerred to in clause (a) or (b) above.
2. For investment in immovable properties;
Person ol Indian Crigin means an individual (not being a citizen ol Pakistan or BangladesL or
AlgLanistan or BLutan or Sri Lanka or epal or CLina or Iran):
a) wLo at any time, Leld an Indian passport or
b) wLo or eitLer ol wLose latLer or wLose grandlatLer was a citizen ol India by virtue ol tLe
Constitution ol India or tLe CitizensLip Act, 1955(5/ ol 1955)
3. For the purpose of PIO card scheme;
A loreign citizen il Le/sLe at any time Leld an Indian Passport, or Le/sLe or eitLer ol Lis/Ler parents
or grand parents or great grand parents was born in and permanently resident in India as delined in tLe
Covernment ol India Act,1935 or Lis/Ler spouse (lor details, see CLapter 5 on PICs).
What is an Overseas Corporate Body (OCB)?
Prior to deletion ol CCB as a class ol investors witL ellect lrom September 16, 2003 tLe term 'Cverseas
Corporate Body` was delined as a company, partnersLip lirm, society and otLer corporate body wLolly
owned, directly or indirectly, to tLe extent ol at least sixty percent by on-Resident Indians and included
overseas trusts in wLicL not less tLan sixty percent benelicial interest is Leld by on-Resident Indians,
directly or indirectly but irrevocably.
However, CCBs wLicL Lad prior to September, 16, 2003 availed ol investment lacilities under various
scLemes Lave general permission to continue to Lold/transler/gilt (to on Resident Indians/Residents
in India) tLeir existing investments in sLares/convertible debentures/securities ol Indian companies.
Indian companies can allot bonus sLares accruing to tLe CCBs. JLose wLicL are incorporated in tLe Lost
country and are not under adverse notice ol RBI may be considered, lor undertaking lresL investments,
as incorporated non-resident entities by RBI/Covernment on case by case basis.
BANK ACCOUNTS
RIs/PICs are permitted to open bank accounts in India out ol lunds remitted lrom abroad, loreign
excLange brougLt in lrom abroad or out ol lunds legitimately due to tLem in India.
SucL accounts can be opened witL banks specially autLorised by tLe Reserve Bank in tLis beLall
AutLorised Dealers].
JLere are tLree types ol on-Resident accounts:
RUPEE ACCOUNTS
1) Mon- Bcsidcnt (Extcrnal) Bupcc Accounts (MBE Accounts)
RIs and PICs are eligible to open RE Accounts. JLese are rupee denominated accounts. Accounts
can be in tLe lorm ol savings, current, recurring or lixed deposit accounts. Accounts can be opened by
remittance ol lunds in lree loreign excLange. Ioreign excLange brougLt in legally, repatriable incomes ol
tLe account Lolder, etc. can be credited to tLe account. ]oint operation witL otLer RIs/PICs is permitted.
Power ol attorney can be granted to residents lor operation ol accounts lor limited purposes.
JLe deposits can be used lor all legitimate purposes. JLe balance in tLe account is lreely repatriable.
Interest lying to tLe credit ol RE accounts is exempt lrom tax in tLe Lands ol tLe RI.
Iunds Leld in RE accounts may be lreely translerred to Ioreign Currency on Resident (ICR) accounts
ol tLe same account Lolder. Likewise, lunds Leld in ICR accounts may be translerred to RE accounts
ol tLe same account Lolder.
2) Crdinary Mon-Bcsidcnt Account (MBC Accounts )
JLese are Rupee dominated non-repatriable accounts and can be in tLe lorm ol savings, current, recurring
or lixed deposits. JLese accounts can be opened jointly witL residents in India. WLen an Indian ational
/PIC resident in India leaves lor taking up employment etc. outside tLe country, otLer tLan epal or
BLutan, Lis bank account in India gets designated as RC account.
JLe deposits can be used to make all legitimate payments in rupees. Interest income lrom RC accounts
is taxable. Interest income, net ol taxes is repatriable. AutLorised dealers may allow remittances upto LS
$ 1 million, per calendar year, out ol balances Leld in RC account lor any bonalide purpose.
FOREIGN CURRENCY ACCOUNTS
3) Ioreign Currency on Resident (Bank) Accounts (ICR (B) Accounts)
RIs/PICs are permitted to open sucL accounts in LS dollars, Sterling Pounds, ]apanese Yen, Euro,
Canadian Dollars and Australian Dollars. JLe accounts may be opened in tLe lorm ol term deposit
lor any ol tLe tLree maturity periods viz, (a) one year and above but less tLen two years (b) two years
and above but less tLen tLree years and (c) tLree years only. ow RBI Las allowed banks to accept
ICR (B) deposits upto maximum maturity period ol live years.
Interest income is tax lree in tLe Lands ol tLe RI until Le maintains a non-resident status or a
resident but not ordinarily resident status under tLe Indian tax laws.
ICR (B) accounts can also be utilised lor local disbursement including payment lor exports lrom
India, repatriation ol lunds abroad and lor making investments in India, as per loreign investment
guidelines.
CHAPTER - 1
INTRODUCTION
3 Ministry ol Cverseas Indian Allairs
1.1 CVEBVIEW CI IDIA'S ECCCMY
India: Accelerating Growth
(Simple average of rates of growth of GDP in the preceding ten years)
India is tLe largest democracy and +
tL
largest economy (in terms ol purcLase power parity) in tLe world. India
is also tLe tentL most industrialized country in tLe world. WitL its consistent growtL perlormance and abundant
LigL-skilled manpower, India provides enormous opportunities lor investment, botL domestic and loreign.
Major relorm initiatives Lave been taken since 1991, in tLe lields ol investment, trade, linancial sector,
excLange control simplilication ol procedures, enactment ol competition and amendments in tLe intellectual
property rigLt laws, etc.
INTRODUCTION
4
Handbook for Cvcrscas Indians
Ministry ol Cverseas Indian Allairs
BASIC ECCCMIC STATISTICS
CDP at current prices (200+-2005) 28+3.9 (Rs JLousand Crore)
CDP growtL rate : 200+-05 6.9%
ExcLange Rate Rs. ++.25/ $ (Average ExcLange Rate lor April 05-]anuary 06)
Ioreign ExcLange Reserves LS $ 1+0.6 billion (as on ]uly 29, 2005)
Exports 200+-05 LS $ 82.15 billion, CrowtL Rate : 23.9%
Imports 200+-05 LS $ 118./8 billion, CrowtL Rate : +8.5%
Ioreign Direct Investment 200+-05 LS $ 5.6 billion
JLe service sector improved its perlormance signilicantly lrom /.9% in 2002-03 to 9.1% in 2003-0+. JLe
strong perlormance ol tLe capital goods sector coupled witL increased imports ol capital goods also augurs
well lor domestic capacity expansion in a large number ol industries. JLe present trend indicates a positive
outlook lor industrial growtL due to improved capacity utilization, improved industrial climate, expanding
external and domestic demand and ease in availability ol credit.
JLe strong and positive outlook ol botL loreign and domestic investors indicates tLat India is ready lor a big
pusL as tLe growing interest ol loreign investors is coinciding witL tLe rising conlidence ol domestic private
investors. JLe increasing elliciency and competitiveness ol domestic producers, liberalized trade, and
deregulated interest rate regime are critical contributors to botL growtL acceleration and macro economic
stability.
1.2 BLSIESS EVIBCMET I IDIA
A number ol studies in tLe recent past Lave LigLligLted tLe growing attractiveness ol India as an investment
destination. According to tLe study 'Dreaming witL BRICS` by Coldman SacLs, Indian economy is expected
to continue growing at tLe rate ol 5% or more till 2050. Some ol tLese conclusions are listed below:
2 2
nd
most attractive destination - A.J. Kearney Business Conlidence Index, 2005
2 2
nd
most attractive investment destination among Jransnational Corporations -LCJAD`s 'World
Investment Report, 2005`
2 Most attractive location lor ollsLoring" ol service activities - A. J. Kearney Clobal Service
Location Index 2005
Covernment Las put in place a liberal, transparent and investor lriendly Ioreign Direct Investment policy
(IDI), wLerein IDI upto 100% is allowed under automatic route lor most ol tLe sectors/activities, wLere
tLe investor does not require any prior approval. Cnly notilication to tLe Reserve Bank ol India witLin 30
days ol inward remittance or issue ol sLares to non-residents is required. Cases requiring prior Covernment
approval are considered by tLe Ioreign Investment Promotion Board (IIPB) in a time bound and transparent
manner. JLe IDI policy in India is considered as one ol tLe most liberal, witL very lew barriers.
INTRODUCTION
6
1.3 LIBEBALIZED PCLICY IBAMEWCBK ICB IVESTMET BY
C-BESIDET IDIAS
JLe Covernment attacLes importance to investments by RIs. Covernment Las provided a liberalized policy
lramework lor approval ol RI investments tLrougL botL tLe automatic and tLe Covernment route. RIs
are permitted to invest upto 100% equity in tLe Real Estate and Civil Aviation sectors. Automatic approval
is given by tLe RBI to all RI proposals witL tLeir investment upto 100% lor all items/activities (Annexures
3,+,5) except a lew exceptions mentioned in Press ote 2 (2000 series) read witL sector specilic guidelines.
Covernment approval is required lor all proposals not qualilying under tLe Automatic Route.
Proposals lor conversion ol RI investment into repatriable equity are LitLerto being considered by tLe
IIPB lor approval. JLis procedure Las been reviewed in tLe context ol various liberalization measures taken
by tLe Covernment in tLe recent past. It is clarilied tLat in terms ol Press ote + (2001 series), all proposals
would qualily lor conversion ol non-repatriable equity into repatriable equity under tLe automatic route
provided:
2 JLe original investment by tLe RI was made in loreign excLange under tLe IDI ScLeme
2 JLe sector/activity in wLicL tLe investment is proposed to be converted into repatriable equity is
on tLe automatic route lor IDI.
Ma|or initiativcs/inccntivcs for BIs and Iorcign Dircct Invcstmcnt
JLe government took several steps in tLe current year in tLe area ol loreign direct investment (IDI) in luture
pursuit ol its already committed patL ol policy transparency and liberalization in IDI. IDI up to 100 per
cent is now permitted on tLe automatic route in all sectors/activities except: (a) activities requiring industrial
license under tLe Industries Development and Regulation Act,(b) proposals wLere tLe loreign investor Lad
an existing joint venture/tecLnical collaboration /trademark agreement in tLe same lield ol activity,
(c) proposal lor acquisition ol sLares in an Indian company in tLe linancial services sector & wLere SEBI
(Substantial Acquisition ol SLares and Jakeovers) Regulation, 199/ is attracted and (d) all proposals lalling
outside notilied sectoral policy /caps or under sectors in wLicL IDI is not permitted. Some ol tLe specilic
measures, wLicL Lave been taken are as lollows:
L IDI cap in tLe domestic airlines sector Las been enLanced lrom +0 per cent to +9 per cent and
RI investment is permitted up to100 per cent witL no direct or indirect equity participation by
tLe loreign airlines.
L IDI up to 100 per cent under tLe automatic route is now permitted lor development ol townsLip,
Lousing, built up inlrastructure and construction development projects. JLe minimum area
requirement Las been reduced to 10 Lectares lor serviced Lousing plots and 50,000 square meters
built up area lor construction-development projects. Ior investment by RIs, tLe conditions are
not applicable.
L IDI cap Las been increased lrom +9 per cent to /+ per cent in basic and cellular telecom services.
JLe revised cap includes botL IDI and portlolio investment.
L IDI Las been permitted in IM Radio Broadcasting up to a maximum ol 20 per cent (wLicL is
inclusive ol IDI, RI, PIC and III).
L Cuidelines lor approval ol loreign/ tecLnical collaborations lor project witL existing joint venture/
collaboration in tLe same lield Lave been reviewed.
As a measure towards simplilication ol tLe existing procedures in IDI, tLe lollowing activities Lave been
placed on tLe general permission route ol RBI:
L Jransler ol sLares in an existing Indian company lrom residents to non residents and vice-versa
(except in tLe linancial sector and wLere SEBI takeover code is attracted),
L Conversion ol ECB/loan into equity, provided tLe activity is covered under tLe automatic route
and tLe loreign equity alter sucL conversion lalls witLin tLe sectoral cap,
L Conversion ol prelerence sLares into equity provided tLe increase in loreign equity participated
is witLin tLe sectoral cap and tLe activity is tLe automatic route, and
L Conversion ol non-repatriable equity invested by RIs in loreign excLange into repatriable equity
allowed under tLe automatic route provided tLe original investment was made in loreign excLange
under tLe IDI scLeme notilied under tLe IEMA regulation and tLe sector/activity is wLicL tLe
investment is proposed to be converted into repatriable equity is on tLe automatic route lor IDI.
INTRODUCTION
CHAPTER - 2
FDI/NRI INVESTMENT IN INDIA
2.1 PCLICY C IDI/BI IVESTMET
India Las among tLe most liberal and transparent policies on IDI among tLe emerging economies. IDI up to
100% is allowed under tLe automatic route in all activities/ sectors (Annexures III,IV,V) except tLe lollowing
tLat require prior approval ol tLe Covernment:
1. Activities/items tLat require an Industrial license (Annexure VI).
2. Proposals in wLicL tLe loreign collaborator Las an existing linancial / tecLnical collaboration in
India in tLe 'same` lield (Press ote no. 1 ol 2005 series),
3. Proposals lor acquisition ol sLares in an existing Indian Company in:
2 Iinancial Services Sector and
2 WLere Securities & ExcLange Board ol India (Substantial Acquisition ol SLares and
Jakeovers) Regulation, 199/ is attracted,
+. All proposals lalling outside notilied sectoral policies/caps or under sectors in wLicL IDI is not
permitted. (Reler Annexure II )
IDI policy is reviewed on an on going basis and cLanges in sectoral policy /sectoral equity cap are notilied
tLrougL Press otes by tLe Secretariat lor Industrial Assistance (SIA), Department ol Industrial Policy and
Promotion. All Press otes are available at tLe Website (www.dipp.gov.in). Reserve Bank ol India (RBI)
under Ioreign ExcLange Management Act (IEMA) also notilies IDI policy. Please reler to RBI website
(www.rbi.org.in).
PBCHIBITED SECTCBS
JLe extant policy does not permit IDI in tLe lollowing cases,
1. Cambling and Betting
2. Lottery Business
3. Atomic Energy
+. Retail Jrading
5. Agricultural or plantation activities or Agriculture (excluding Iloriculture, Horticulture,
Development ol Seeds, Animal Husbandry, Pisciculture and Cultivation ol Vegetables,
MusLrooms etc. under controlled conditions and services related to agro and allied sectors) and
Plantations (otLer tLan Jea plantations)
12
2.2 PBCCEDLBES
PBCCEDLBE LDEB ALTCMATIC BCLTE
IDI in sector/ activities to tLe extent permitted under automatic route does not require any prior approval
eitLer by Covernment ol India or RBI. JLe investors are only required to notily tLe Regional ollice concerned
ol RBI witLin 30 days ol receipt ol inward remittances and lile tLe required documents witL tLat ollice
witLin 30 days ol issue ol sLares to loreign investors.
PBCCEDLBE LDEB CCVEBMET APPBCVAL
IDI in activities not covered under tLe automatic route requires prior Covernment approval and are considered
by tLe Ioreign Investment Promotion Board (IIPB). Approvals ol composite proposals involving loreign
investment / loreign tecLnical collaboration are also granted on tLe recommendations ol tLe IIPB.
SucL applications lor IDI cases, except on-Resident Indian (RI) investments and 100% Export Criented
Lnits (ECLs), sLould be submitted to tLe IIPB Lnit, Department ol Economic Allairs (DEA), Ministry ol
Iinance.
Applications lor RI and 100% ECL cases sLould be presented to SIA in Department ol Industrial Policy
and Promotion.
Applications can also be submitted witL Indian Missions abroad wLo lorward tLem to tLe Department ol
Economic Allairs lor lurtLer processing.
Applications can be made in Iorm IC-IL wLicL can be downloaded lrom www.dipp.gov.in. Plain paper
applications carrying all relevant details are also accepted. o lee is payable.
CEEBAL PEBMISSIC CI BBI LDEB IEMA
Indian companies Laving loreign investment approval tLrougL IIPB route do not require any lurtLer clearance
lrom RBI lor receiving inward remittance and issue ol sLares to tLe loreign investors. JLe companies are
required to notily tLe concerned regional ollice ol tLe RBI ol receipt ol inward remittances witLin 30 days
ol sucL receipt and witLin 30 days ol issue ol sLares to tLe loreign investors or RIs.
CEEBAL PEBMISSIC TC BIs/PICs
JLe Reserve Bank Las granted general permission to RIs/PICs lor undertaking direct investment in Indian
Companies under tLe automatic route, purcLase ol sLares under Portlolio Investment ScLemes, investment
in companies and proprietorsLip/ partnersLip concerns on non-repatriation basis and lor remittances ol
current income. RIs/PICs do not Lave to seek specilic permission lor approved activities under tLese
scLemes.
JLe Reserve Bank ol India Las now lurtLer simplilied linancial transactions by RIs/PICs by granting
general permissions to:
1. Resident individuals, partnersLip/proprietorsLip concerns to avail ol interest bearing rupee loans lrom
RIs/PICs out ol lunds remitted by tLem lrom abroad or out ol lunds Leld in tLeir bank accounts in
India, on non - repatriation basis, subject to certain conditions, one ol tLem being tLat tLe rate ol
interest on sucL loans sLould not exceed Bank Rate plus two percentage points.
2. RIs/PICs to transler by way ol gilt sLares Leld by tLem in Indian companies and to transler by way
ol gilt immovable property Leld by tLem in India subject to compliance witL otLer applicable rules/
regulations including tLe provisions ol Ioreign Contribution Regulations Act, 19/6 by tLe cLaritable
trust/organisation concerned.
3. All domestic public/private sector mutual lunds lor issue ol units to RIs/PICs on botL repatriation
and non repatriation basis.
+. RIs/PICs to place deposits witL Indian lirms, on non-repatriation basis and witL Indian companies
on non-repatriation basis out ol domestic sources.
5. RIs/PICs lor sale ol sLares acquired under direct investment ScLemes on stock excLanges in India.
6. RIs/PICs lor transler ol sLares, by way ol sale under private arrangement to anotLer RI or to a
resident.
/. RBI permission is not required lor drawal ol loreign excLange lor purcLase ol trade marks or lrancLise
in India.
8. RIs/PICs may remit tLe sale proceeds ol immovable property witLout tLe lock in period ol 10 years
subject to maximum ol 1 million LSD per calendar year.
RIs/PICs Lave been granted general permission to invest in Covernment Securities and Jreasury Bills.
Jaking into account tLe lacilities tLat are already available, and tLe above new measures, RIs/PICs will
not Lave to seek specilic permission ol Reserve Bank lor a wLole variety ol approved linancial/investment
transactions. JLis sLould considerably reduce paper work and time taken lor undertaking sucL transactions.
DIBECT IVESTMET CPPCBTLITIES
RIs can invest in India as under:
1. Investment under Automatic Route witL repatriation benelits
2. Investment witL Covernment approval
3. CtLer Investments witL repatriation benelits
+. Investments upto 100% equity witLout repatriation benelits
5. CtLer Investments by RIs witLout repatriation benelits.
1. ALTCMATIC BCLTE CI BBI WITH BEPATBIATIC BEEIITS
RIs can invest in sLares/convertible debentures ol Indian companies under tLe Automatic Route witLout
obtaining Covernment or RBI permission except lor a lew sectors wLere IIPB permission is necessary, or
wLere tLe investment can be made only upto a certain percentage ol paid up capital.
14
Ior lull details ol tLe Automatic Route, investors may see website ol Department ol Industrial Policy &
Promotion.
2. IVESTMET WITH CCVEBMET APPBCVAL
Investment not eligible under tLe Automatic Route, are considered by tLe Ioreign Investment Promotion
Board (IIPB), a LigL Powered inter-ministerial body under tLe cLairmansLip ol Secretary, Department ol
Economic Allairs, subject to sectoral limits/norms. JLese investments also enjoy lull repatriation benelits
3. CTHEB IVESTMETS WITH BEPATBIATIC BEEIITS
1. Investment in units ol domestic mutual lunds
2. Investment in bonds issued by public sector
undertakings
3. PurcLase ol SLares ol Public sector enterprises
being disinvested by CCI.
+. Investment in government dated securities
(otLer tLan bearer securities) or Jreasury Bills
4. IVESTMETS LPTC 100% EQLITY WITHCLT BEPATBIATIC BEEIITS
1. Capital contribution to any
proprietary or partnersLip
concern
2. ew issues ol sLares/
debentures ol Indian
companies
5. CTHEB IVESTMETS BY BIs WITHCLT BEPATBIATIC BEEIITS.
(i) Investment in on Convertible Debentures
(ii) Money Market Mutual Iunds
(iii) Deposits witL companies
(iv) Commercial Papers
RIs are permitted to invest in tLe
secutities witL repatriation benelits.
RIs can invest by way ol capital contribution in any proprietary or
partnersLip concern in India provided tLe lirm or tLe proprietary
concern is not engaged in any agricultural/plantation activities or
real estate business or print media on non- repatriation basis subject
to certain conditions.
RIs Lave been granted general permission to subscribe to tLe sLares/
convertible debentures ol an Indian company on non- repatriation
basis, and to an Indian company to issue sLares or convertible
debentures by way ol new/rigLts/bonus to RIs on non- repatriation
basis provided tLat tLe investee company is not engaged in
agricultural/plantation activities or real estate business (excluding real
estate development i.e., development ol property or construction ol
Louses ) or cLit lund or is not a idLi Company.
16
2.3 ETBY CPTICS ICB IVESTCBS
ETBY CPTICS
A loreign company planning to set up business operations in India Las tLe lollowing options:
AS A ICCBPCBATED ETITY
By incorporating a company under tLe Companies Act, 1956 tLrougL
i ]oint Ventures, or
ii WLolly Cwned Subsidiaries
Ioreign Equity in sucL Indian Companies can be up to 100% depending on tLe requirement ol tLe
investor, subject to any equity caps prescribed in respect ol tLe area ol activities under tLe Ioreign
Direct Investment (IDI) policy.
AS A LICCBPCBATED ETITY
i) As a loreign Company tLrougL
i. Liaison Cllice/Representative Cllice
ii. Project Cllice
iii. BrancL Cllice
SucL ollices can undertake activities permitted under tLe Ioreign ExcLange Management (EstablisLment
in India ol BrancL or Cllice or otLer place ol business) Regulations, 2000.
ICCBPCBATIC CI A CCMPAY
Ior registration and incorporation, an application Las to be liled witL tLe Registrar ol Companies
(RCC). Cnce a company Las been duly registered and incorporated as an Indian Company, it is subject
to Indian Laws and regulations as applicable to otLer domestic Indian companies.
Ior details please visit tLe website ol Ministry ol Company Allairs at www.mca.gov.in.
LIAISC CIIICE/ BEPBESETATIVE CIIICE
JLe role ol liaison ollice is limited to collecting inlormation about possible market opportunities and
providing inlormation about tLe company and its products to prospective Indian customers. It can
promote export/import lrom/to India and also lacilitate tecLnical/linancial collaboration between parent
company and companies in India. Liaison ollice can not undertake any commercial activity directly or
indirectly and can not, tLerelore, earn any income in India. Approval lor establisLing a liaison ollice in
India is granted by Reserve Bark ol India (RBI).
PBCjECT CIIICE
Ioreign Companies planning to execute specilic projects in India can set up a temporary project /site
ollices in India. RBI Las now granted a general permission to loreign entities to establisL Project Cllices
subject to specilied conditions. SucL ollices can not undertake or carry on any activity otLer tLan
activity relating and incidental to execution ol tLe project. Project ollices may remit outside India tLe
surplus ol tLe project on its completion, general permission lor wLicL Las been granted by tLe RBI.
BBACH CIIICE
Ioreign companies engaged in manulacturing and trading activities abroad are allowed to set up BrancL
Cllices in India lor tLe lollowing purposes:
a. Export/Import ol goods
b. Rendering prolessional or consultancy services
c. Carrying out researcL work, in wLicL tLe parent company is engaged.
d. Promoting tecLnical or linancial collaborations between Indian companies and parent or overseas group
company.
e. Representing tLe parent company in India and acting as buying/selling agents in India.
l. Rendering services in Inlormation JecLnology and development ol soltware in India.
g. Rendering tecLnical support to tLe products supplied by tLe parent/ group companies.
L. Ioreign airlines/sLipping company
BrancL Cllices establisLed witL tLe approval ol RBI, may remit outside India prolit ol tLe brancL, net ol
applicable Indian taxes and subject to RBI guidelines. Permission lor setting up brancL ollices is granted by
tLe Reserve Bank ol India (RBI).
BBACH CIIICE C STAD ALCE BASIS" I SEZ
SucL BrancL Cllices would be isolated and restricted to Special Economic Zone (SEZ) alone and no business
activity/ transaction will be allowed outside tLe SEZs in India, wLicL include brancLes/subsidiaries ol its
parent ollice in India.
o approval sLall be necessary lrom RBI lor a company to establisL a brancL /unit in SEZs to undertake
manulacturing and service activities subject to tLe lollowing conditions:
a. SucL units are lunctioning in tLose sectors wLere 100% IDI is permitted.
b. SucL units comply witL part XI ol tLe Companies Act(section 592 to 602)
c. SucL units lunction on a stand alone basis,
d. In tLe event ol winding up ol business and lor remittance ol winding-up proceeds, tLe brancL sLall
approacL an autLorized dealer in loreign excLange witL tLe document required as per IEMA.
18
Proccdurc for Liaison officc/Pro|cct officc/Branch officc
Application lor setting up Liaison Cllice/ Project ollice / BrancL Cllice may be submitted to CLiel
Ceneral Manager, ExcLange Control Department (Ioreign Investment Division), RBI Central Cllice,
Mumbai-+00 001, in tLe lorm IC 1 (available at RBI website at www.rbi.org.in).
IVESTMET I A IIBM CB A PBCPBIETABY CCCEB BY BIS
A on-Resident Indian or a Person ol Indian Crigin resident outside India may invest by way ol
contribution to tLe capital ol a lirm or a proprietary concern in India on a non-repatriation basis
provided,
i) Amount is invested by inward remittance or out ol RE/ICR/RC account maintained witL
AutLorised Dealer.
ii) JLe lirm or proprietary concern is not engaged in any agricultural/plantation or real estate business i.e.
dealing in land and immovable property witL a view to earning prolit or earning income tLere lrom.
iii) Amount invested sLall not be eligible lor repatriation outside India.
RIs/PICs may invest in sole proprietorsLip concerns/ partnersLip lirms witL repatriation benelits witL tLe
approval ol Department ol Economic Allairs, Covernment ol India/ RBI.
2.4 SPECIAL ECCCMIC ZCES
A policy lor setting up ol Special Economic Zones in tLe country witL a view to provide an
internationally competitive and Lassle lree environment lor exports was introduced on 1.+.2000. Spccial
Economic Zonc (SEZ) is a spccifically dclincatcd duty frcc cnclavc and shall bc dccmcd to bc forcign
tcrritory for thc purposcs of tradc opcrations and dutics and tariffs. Coods and services going into
SEZ areas lrom Domestic Jarill Area (DJA) are treated as exports and goods coming lrom SEZ area
into DJA area are to be treated as il tLese are being imported. Special Economic Zones Act, 2005
provides lor tLe establisLment, development and management ol Special Economic Zones lor tLe
promotion ol exports and lor tLe matters connected tLerewitL or incidental tLereto. JLe policy provides
lor setting ol SEZ`s in tLe public, private joint sector or by State Covernments.
Distinguishing Icaturcs
Indian SEZ Act, 2005 Las lollowing distinguisLing leatures:
1. JLe zones are proposed to setup by private sector or by State Covt. in association witL Private
sector. Private sector is also invited to develop inlrastructure lacility in tLe existing SEZs.
2. State Covt. Las a lead role in tLe setting up ol SEZ.
3. A lramework is being developed by creating special by creating special windows under existing
rules and regulations ol tLe Central Covt. and State Covt. lor SEZ.
SETTIC LP CI SEZ BY DEVELCPEB
Setting up ol SEZ in tLe Public, Private, ]oint Sector or by tLe State Covt. :
WitL a view to augmenting inlrastructure lacilities lor export production it Las been decided to permit
tLe setting up ol Special Economic Zones (SEZs) in tLe public, private, joint sector or by tLe State
Covt. JLe minimum size ol tLe Special Economic Zone sLall not be less tLan 1000 Lectares. Minimum
area requirement sLall, Lowever, not be applicable to product specilic and port/airport based SEZ.
JLis measure is expected to promote sell contained areas supported by world-class inlrastructure oriented
towards export production. Any private /public/joint sector or State Covt. or its agencies can set up
Special Economic Zone (SEZ)
Critcria for approval
Proposals lor setting up SEZ in tLe Public/Private/]oint/State sector are required to meet tLe lollowing
conditions:
(i) Minimum size ol tLe SEZ sLall not be less tLan 1000 Lectares. JLis would Lowever, not apply to
existing EPZs converting into SEZs as sucL or lor notilying additional area as a part ol sucL SEZ or to
product specilic port/airport based SEZs.
(ii) JLe SEZ and units tLerein sLall abide by local laws, rules , regulations or bye-laws in regard to area
planning, sewerage disposal, pollution control and tLe like . JLey sLall also comply witL industrial and
labour laws and sucL otLer laws /rules and regulations as may be locally applicable.
20
(iii) SucL SEZ sLall make adequate arrangements to lullill all tLe requirements ol laws, rules and
procedures applicable to sucL SEZ.
(iv) Cnly units approved under tLe SEZ scLemes would be permitted to be located in tLese SEZ.
(v) At least 25% area ol tLe SEZ sLall be used lor developing industrial area lor setting up sucL units.
How to apply
Applications (15 copies) indicating tLe name and address ol tLe applicant, status ol tLe promoter (wLetLer
individual/ private company/ State Covt. /RIs etc.) along witL a project report covering tLe lollowing
particulars sLall be submitted to tLe CLiel Secretary ol tLe State:
i) Location ol tLe proposed zone witL details ol tLe existing and proposed inlrastructure,
ii) Area ol tLe proposed SEZ and its area distance lrom tLe nearest Sea Port/ Airport/ Rail/ Road Lead
etc.
iii) Iinancial details including investment proposed, mode ol linancing tLe project and viability ol tLe
project.
iv) Details ol loreign equity and repatriation ol dividend etc., il any.
v) WLetLer tLe zone will allow only certain specilic industries or will be a multinational zone or it is a port
/airport based zone.
JLe State Covt. sLall, lorward it along witL tLeir commitment to tLe lollowing , to tLe Department ol
Commerce , Covt. ol India.
JLe area incorporated in tLe proposed Special Economic Zone is lree lrom environmental proLibition,
Water and Electricity and otLer services would be provided as required,
Iull exemption in electricity duty and tax on sale ol electricity lor sell generated and purcLase power,
Jo allow generation, transmission and distribution ol power witLin SEZ.
vi) Exemption lrom State Sales Jax, Cctroi, Mandi tax, Jurnover tax and taxes, duty, cess, levies on supply
ol goods lrom Domestic Jarill Area to SEZ units,
vii) Ior units inside tLe Zone, tLe power under tLe Industrial Dispute Act and otLer related Act would be
delegated to tLe Development Commissioner.
viii) JLe Zone will be declared as a Public Ltility Service under Industrial Dispute Act.
ix) Single point clearances system would be provided to tLe units in tLe Zone under State Laws/ Rules.
JLe proposal incorporating tLe commitments ol tLe State Covt. sLall be considered by tLe Board ol
Approval (BCA) as notilied vide notilication o 1+/ 1 / 2001-EPZ dated /.8.2001.
Cn acceptance ol tLe proposal by tLe Board ol Approval , tLe Department ol Commerce will issue a
Letter ol Permission to tLe applicant,
Iacilitics and Inccntivcs for Dcvclopcrs
L Developers ol SEZ may import / procure goods witLout payment ol duty lor tLe development, operation
and maintenance ol SEZ.
L Income tax exemption lor a block period ol 10 year in 15 years at tLe option ol developer as per Section
80IAB ol tLe Income Jax Act .
L Iull lreedom in allocation ol developed plots to approved SEZ units on a purely commercial basis.
L Iull autLority to provide service like water, electricity, security , restaurants, recreation centers etc. on
commercial lines.
L Ioreign investment permitted to develop townsLip witLin tLe SEZ witL residential area , market, play
grounds, clubs, recreation centers etc.
L Develop Standard Design Iactory (SDI) building in existing SEZ.
L Income Jax Exemption to investor`s in SEZ`s under Section 10(23C) ol Income Jax Act.
L Exemption lrom Service Jax
L Investment made by individuals etc. in SEZ company also eligible lor exemption u/s 88 ol tLe Income
Jax Act.
L Development promoted to transler inlrastructure lacility lor operation and maintenance u/s 80-IA ol
tLe Income Jax Act.
L Ceneration, Distribution and Jransmission ol Power in SEZs allowed.
SETTIC LP CI SEZ ETEBPBISE
Iacilitics in Spccial Economic Zonc
A new Special Economic Zone (SEZ) scLeme Las been introduced in tLe Export and Import policy lrom 1st
April 2000, witL a view to provide an internationally competitive & Lassle lree environment lor export
production.
IDIA SEZ - Salicnt Icaturcs and Iacilitics
L A designated duty lree enclave and to be treated as loreign territory lor trade operations and duties and
tarills.
L o License required lor import.
L Exemption lrom custom duty on import ol capital goods, raw materials, consumable spares etc.
L Exemption lrom Central Excise duty on procurement ol Capital goods, raw materials, consumables
spares etc. lrom tLe domestic market.
22
L Supplies lrom DJA to SEZ units treated as deemed exports.
L Reimbursement ol Central Sales Jax paid on Domestic purcLases.
L 100% income tax exemption lor a block period ol 5 years, 50% tax exemption lor next live years
u/s 10AA ol tLe Income Jax Act.
L Carry lorwarded ol losses.
L 100% income tax exemption lor 5 consecutive years & 50% lor 5 years under section 80LA ol tLe
income tax Act lor oll sLore banking units
L Reimbursement ol duty paid on lurnace oil, procured lrom domestic oil companies to SEZ units as per
tLe rate ol drawback notilied by tLe Directorate Ceneral ol Ioreign Jrade.
L SEZ units may be lor manulacturing, trading or service activity.
L SEZ unit to be positive net loreign net excLange earner witLin tLree years.
L Perlormance ol tLe unit to be monitored by a committee Leaded by Development Commissioner and
consisting ol Customs.
L 100% loreign direct investment in Manulacturing, sector allowed tLrougL automatic route barring a lew
sectors.
L Iacility to retain 100% loreign excLange receipts in EEIC a/c
L Iacility to realize and repatriate export proceeds witLin 12 montLs
L Re-export imported goods lound delective, goods imported lrom loreign supplier on loan basis etc.
witLout C.R. Waiver under intimation to tLe Development Commissioner
L Write oll ol unrealized export bills up to 5%
L Commodity Ledging by SEZ units permitted
L Capitalisation ol import payables.
L o Cap on loreign investment lor SSI reserved items
L Exemption lrom industrial licensing requirement lor items reserved lor SSI sectors
L Prolits allowed to be repatriated lreely witLout any dividend balancing requirement
How to apply
Ior setting up a unit in an SEZ, tLree copies ol tLe application in tLe specilied lorm may be submitted to tLe
Development Commissioner (DC) ol tLe SEZ Concerned.
Proposals lor setting up units in tLe SEZ otLer tLan tLose requiring Industrial Licence may be granted
approval by Development Commissioner witLin 15 Days.
Proposals lor setting up units in tLe SEZ requiring Industrial Licence may be granted approval by tLe
Development Commissioner alter clearance ol tLe proposal by tLe SEZ Board ol Approval and Department
ol Industrial Policy and Promotion witLin +5 Days.
Letter ol permission (LCP) / Letter ol Intent (LCI) issued to SEZ units by tLe Development Commissioner
would be construed as a licence lor all purposes, including lor procurement ol raw material and consumables
eitLer directly or tLrougL canalizing agency.
JLe LCP/LCI sLall specily tLe items ol manulacture/service activity, annual capacity, projected annual
export lor tLe lirst years in dollar terms, et Ioreign ExcLange Earning (IE), limitations, il any, regarding
sale ol linisLed goods, by products and rejects in tLe DJA and sucL otLer matter as may be necessary and
also impose sucL conditions as may be required.
Tcrms and Conditions
SEZ units Lave to be a Positive et Ioreign ExcLange Earner.
Perlormance ol tLe unit will be monitored by a committee consisting ol Development Commissioner ol tLe
Zone and Customs.
Lnits sLall maintain proper accounts and lurnisL details regarding value ol import, export etc. to Development
Commissioner on a quarterly basis.
Criteria to be Adopted lor Automatic Approval ol Lnits under ECL/SEZ ScLemes
Approval of cw Lnits
Proposals lor setting up units under ECL/SEZ scLeme under automatic route sLall be considered by tLe
Lnit Approval Committee taking into account tLe lollowing :-
(i) Residence prool in respect ol individual/partnersLip lirms ol all Directors/ Partners. (Passport/ ration
card/ driving licence /voter identity card or any otLer prool to tLe satislaction ol Development
Commissioner,
(ii) Income Jax return ol all tLe promoters lor tLe last tLree years,
(iii) Experience ol tLe promoters,
(iv) Marketing tie-ups
(v) In case ol ECLs, inspection ol tLe project site by an ollicer
(vi) A report lrom otLer DCs as to wLetLer any case under SEZ/ECL ScLemes in regard to diversion ol
goods etc. is pending.
WLetLer necessary, tLe above may be verilied tLrougL personal interview witL tLe promoters ol tLe project.
In tLe event ol tLe promoters being a well-establisLed entity, tLe procedure ol personal interview may be
dispensed witL.
24
JLe Lnit Approval Committee sLall meet on Monday, every week. In case ol tLe absence ol tLe
Development Commissioner, tLe meeting will be Leld by tLe next senior ollicer in tLe Zone. JLe unit
sLall intimate tLe problems being laced by tLem in advance. In tLe meetings, apart lrom tLe promoters,
tLe otLer concerned agency witL wLicL dilliculties are being laced by tLe unit may also be called.
Recycling ol lerrous and non-lerrous metal proposal will be considered only il tLe unit Las Ingots
making lacility and proposes to acLieve value addition.
Scnsitivc Scctors
Care sLall be taken by tLe Development Commissioner wLile approving projects in sensitive sectors
sucL as yarn texturising unit, textile processing, pLarmaceuticals/ drugs lormulations/ recycling ol
lerrous and non-lerrous metal scraps etc. Projects lor setting up units in sensitive sectors under ECL
scLemes sLall be approved by tLe Development Commissioner alter personal verilication ol tLe Directors
and inspection ol tLe lactory site belore signing LLJ. Verilication could also be carried out tLrougL
Ceneral Manager, District Industries Centre or jurisdictional DY/ Assistant Commissioner ol Excise/
Customs.
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2.5 BLSIESS CPPCBTLITIES I VABICLS STATES
SI. AME SICLE WIDCW WEBSITE EMAIL: ID THBLST ABEAS ICB IVESTMET
C CI STATES ACECY/IIBST
SICLE PCIT
CCTACT
1 ADHRA Commissioner ol Industries aponline.gov.in. comm_inds_ap.gov.in Agro and Iood processing, PLarmaceuticals and
PRADESH CLirag Ali Lane, Abids, www.apind.gov.in CLemical, BiotecLnology, Mining & Mineral, IJ,
Hyderabad - 500 001 Electronic Hardware, Auto & Auto Components,
Jel. o: 91 +0 23++1666, Steel Plants, Precision MacLine Jools, LeatLer
23++1610. Iax: 91 +0 23++1611 & Jextiles.
jd_cc_inds.ap.gov.in
2 KARAJAKA KARAJAKA LDYCC MIJRA www.kumba md_kumbangalore.com Inlormation JecLnology, BiotecLnology,
#+9, KLanija BLavan, 3rd Iloor ngalore.com PLarmaceuticals, Engineering Automobiles & Auto
Race Course Road components, Manulacturing, Maintenance, Repair
& Bangalore-560 001 CverLaul services lor Aerospace, Apparel,
PLone: 080-22282392/ Contract ResearcL / R&D, Cil Relining &
5659/6632Iax: 080-22266063 PetrocLemicals, Agro
& Iood processing Steel & Metallurgy, Cement,
Electronics & Jelecommunications, Precision
Engineering, MacLine Jools, Iloriculture,
Jourism and Inlrastructure.
3 CL]ARAJ Industrial Extension Bureau www.indextb.com indextb_indextb.com Power, Port, Road, Inlormation JecLnology, Agro,
(iDEXJb) Mineral, Jourism
(A Covernment ol Cujarat
Crganization)Block o. 18/2,
Ldyog BLavan
CandLinagar 382 01/,
Cujarat, India
PLone: 91-/9-232 56009/10/
11,Iax: 91-/9-232 2129/
+ WESJ BECAL Director ol Industries Lttp://www. di-wb_Lotmail. PetrocLemicals and downstream industries,
Covernment ol West Bengal wbidc.com/ commvrao1111 Electronics & Inlormation JecLnology, Iron &
9tL lloor, ew Secretariat _redillmail.com Steel, Metallurgical and Engineering, Jextiles,
Buildings, KCLKAJA-/00 001 LeatLer & LeatLer Products,
PLone:22+80238 Iax: 22+8-/2+6 Iood Processing, Cems & ]ewellery, Development
ol Medicinal Plants, Rubber, Palm Cil and Jea,
PLarmaceuticals, Basic Drugs and CLemicals,
Development ol Mines & Minerals, Jourism
Industrial and Social Inlrastructure development.
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5 KERALA Kerala State Industrial www.ksidc.org E mail: di-wb_ Jourism& Hospitality, Inlormation
Development Lotmail.com JecLnology, Business Process Cutsourcing, HealtLcare &
Corporation Ltd.(KSIDC) Medical Jourism, Manulacturing, Inlrastructure,
Keston Road , Kowdiar, BiotecLnology, Iood Processing Agriculture & Agro-
Jrivendrum-695 003, Kerala Industries
PL: 91 +8+-2323010,
lax: 91 +8+-2323011
6 MADHYA Managing Director Lttp://mpsidc.org/ wtcbpl_sancLarnet.in Minerals, Stone Agric, Iood
PRADESH MadLya PradesL State inmpsidc_ Processing, PLarmaceuticals, Herbal, BiotecLnology,
Industrial Development Co. sancLarnet.in Cems & ]ewellery, Jextile, Carments, Jourism,
Ltd. (MPSIDC) & JRIIAC" Auto/Auto Component, Education, Iorest Based,
AV Jowers" Plot o. 192, Inlormation JecLnology, Power Ceneration,
Zone-I MaLarana Pratap Inlrastructure Hospitality & Services.
agar, BLopal- +62011 (MP)
PLone: 0/55-52/03/0, 52/02+6
(D)Iax: 0/55-52/0280
/ RA]ASJHA Commissioner (Investment & Lttp://www.invest bipjpr_raj.nic.in Power, Jextile, Cement, Captive Power Plant, Cranite,
RIs) rajastLan.com IJ, Mineral, Road, SEZ, Jourism, Wasteland
Bureau ol Investment Development, Water, BiotecLnology, on-
Promotion, RajastLan Ldyog Conventional Energy Sources.
BLawan ,Jilak Marg,
]aipur-302 005, India
PL:(91)(1+1)222/2/+, 222/812,
222//13, 222/53/
Iax:(91) (1+1)222/506
8 MAHARASHJRA MaLarasLtra Lttp://www.midc osdldi_midcindia.org Jransport, Roads, Power, Cas, Ports,
Industrial Development india.org, www. orgceo_midcindia.org Special Economic Zones, Inlormation
Corporation sicomindia.com, JecLnology, Bio JecLnology, Agri Business,
`Ldyog SaratLi`, www.maLara PLarmaceutical, HealtLcare, Environment
MaLakali Caves Road, sLtra.gov.in Management, Jourism, Development ol
AndLeri (E),Mumbai - +00 093 Industrial Clusters, Auto,
Board umbers: Jextile, Wine, Entertainment and Leisure, Cems &
91-022-268/0052 / 5+ / /3 ]ewellery.
Iax: 91-022-268/158/
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9 JAMIL ADL Jamil adu Industrial Lttp://www.tiic.org tiicltd_vsnl.com Mines, Ceneration ol Electricity, ursing Homes,
Cuidance & Export Packaging, Hotels, Agro, ResearcL & Development, Bore
Promotion Bureau, Well Rigs, Road laying equipment, manulacturing,
Covt Industries Deptt, processing or preservation ol goods.
Secretariat, CLennai - 600 009.
PL : 256/1383 Iax : 256/0822
10 LJJAR Ldyog bandLu, 12 C, Mall www.udyogban bandLu_sancLarnet.in Jextile, Agriculture,LeatLer, Export Promotion
PRADESH Avenue, Lucknow - 226001 dLu.org Industrial Park, Soltware JecLnology Parks, Special
PL. 91-0522 223//26, www.upsidc.com. Economic Zones, Power, automobiles and ancillaries.
2238508 Iax - 223/3+5
Lttar PradesL State
Industrial Development
Corporation, LPSIDC
Complex,A-1/+ LakLanpur,
Kanpur.Jel: 0512-2582851,
2582852,2582853
Iax: 0512-2580/9/
11 BIHAR Director, Industries Vikas Lttp://gov.biL. dirind_doibiLar.org Agro based industries, Industries based on medicinal
BLawan Patna - 800 001. nic.in dibiLar_yaLoo.co.in and aromatic plants, Sericulture /Jasar, CLemical based
(BiLar) India. PLone : 91-612- industries, Power generating and allied industries,
2235812(C) Electronic and computers and IJ based industries,
Iax : 91-612-222663/ Industries based on non-conventional energy, live
stock based industries, Industries based on recycling
ol wastes, eco lriendly raw materials and processes,
Super speciality HealtL services, Jelecommunications
and related products, Iood processing industry,
Jourism, Plastic and plastic based industries,
PLarmaceutical drugs based industries, LeatLer based
industries, JecLnical Education, Ceramics, Sports goods,
Packaging, Metallurgical Industries, Jextile,
Handicralts, atural Cas Based Industries,
Housing Iixtures and related industries
12 CCA Coa Industrial Development Lttp://www.go goaidc_sancLarnet.in PLarmaceuticals, Inlormation JecLnology, agro-based,
Corporation aidc.com/Lome. lood, lisLeries, processing, tourism, electronics, bio-
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Plot o. Lttp:// tecLnology, ligLt engineering goods, wood carving,
13-A-2, EDC Complex, www.goaidc.com automotive parts, gems and jewellery, diamond cutting,
Patto Plaza, Panjim-Coa garments.
+03 001.Jel: (91)(832)
2+3/+/0 to /3Iax: (91)
(832) 2+3/+/8 to /9
13 CRISSA 1. Industrial Promotion and www.ipicolorissa. inlo_ipicolorissa.com i. Mining and Mineral based Industry
Investment Corporation ol com ii. Petroleum and PetrocLemicals
Crissa Limited (IPICCL), www.orissa. iii. JLermal Power plants
'SLilpa ]yoti'IPICCL House, gov.in iv. Ancillary, downstream and construction pLase
]anpatL,BLubaneswar-/51022, industries lor tLe above
Crissa.Jel.- 91-6/+- 25+2601- v. IJ and IJES
03, Iax- 91-6/+- 25+3/66 vi. Jourism
2. Crissa Investment and Lttp://rc. rescm-or_nic.in vii. Agri-business and Iood Processing
Export Promotion Cllice orissa.gov.in viii. IisLeries and Marine aquaculture
(CIEPC), Cllice ol Resident ix. Engineering / Auto-componentx. Inlrastructure
Commissioner, Covt. ol development
Crissa, Crissa iwas, +
Bordoloi Marg, CLankyapuri,
ew DelLi-110021.
Jel. 91-11-23019//1/
2301+250,
Iax- 91-11-23010839 Lttp://16+.100. diorissa_ori.nic.in
3. Director ol Industries, 1+0.22/diorissa/
(lor Small Scale Industries)
Killa Maidan,Cuttack-/53 001,
Crissa. Jel. - 91-6/1-2301892
Iax - 91-6/1-230122/
1+ PCDICHERRY PCDICHERRY Lttp://www.pip pipdic_vsnl.com
IDLSJRIAL PRCMCJIC dic.com/setup.Ltml
DEVELCPMEJ AD
IVESJMEJ
CCRPCRAJIC
2
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LIMIJED
Post Box. o. 19060
Romain Rolland Street
PondicLerry - 605 001, India
JelepLone : 91 - +13 - 233+606,
2335116, 233+361, 23368+2,
233+06+ Iax : 91 - +13 - 23368+2
15 PL]AB Industrial Iacilitation Cell, Lttp://punjabgovt. pws_punjabmail.gov.
Ldyog SaLayak CLiel nic.in/Industry/ inpsidc_cLd.nic.in ,
Coordinator, Directorate ol LdyogSaLayak. psidc_dot1.net.in
Industries, Punjab, 18 Ltm#contact
Himalya Marg, Ldyog BLawan,
Sector 1/, CLandigarL 16001/
Jel o. 91-01/2-2/152/0,
2/15320, 2/153++,
Iax o. 91-01/2-2//6992
JLe Punjab State
Industrial
Development
Corporation Limited
JelepLones EPABX : 91-1/2-
/02881-8+, /02/91
Iax:91-1/2-/0+1+5
16 HARYAA Investment Promotion Centre, Lttp://www.Laryana. ipccLd_Lry.nic.in Agro based and Iood Processing Industry, Electronics
Directorate ol Industries, nic.in/ip2005 and Inlormation & Communication JecLnology,
Haryana, 30 Bays Building, Automobiles & Automotive Components, Handloom,
Sector 1/, CLandigarL. Hosiery, Jextile and Carments, Manulacturing, Export
PL.01/2 2/013+6/ 2/01221 Criented Lnits, Iootwear, leatLer garments and
accessories.
1/ CHHAJJISCARH Convener,State Investment Lttp://www.cLLatt sipb.cg_nic.in
Promotion Boardear isgarL.nic.in/
Mantralaya, Renuka Dwar, departments/
SLastri CLowk,Raipur sipb/sipb.Ltm
CLLattisgarL - +92 001
PL. 0//1-+066351,+066352
Iax : 0//1-+066315
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18 ]HARKHAD Directorate ol Industry, www.jLarkLand doijLarkLand_ Mining and mineral based Industries, Agro based
epal House, 3rd Iloor, industry. in. doijLarkLand.net Industries, Industries based on medicinal aromatic
Doronda, RancLi plants, Sericulture/Jasar, Iorest based Industry like
Jel: 91- 651 -2+918++ sLellac, bamboo etc, Engineering, auto component, iron
Iax: 91-651-2+9188+ & steel and steel based downstream industries,
CLemical based industries, Power generating and
allied industries, electronics and computers and IJ
based Industries, Industries based on non-
conventional energy, livestock based
industries,Industries based on recycling ol wastes,
super specialty LealtL services,
Jelecommunications and related products,Iood
Processing Industries, Jourism, Cold Storages,
Plastic and Plastic bags based industries,
PLarmaceutical/drugs based industries, leatLer
based industries, tecLnical education, ceramics,
sports goods, packaging, metallurgical industries,
textiles, Losiery, knitwear, Landicralts, natural gas
based industries, Lousing lixtures related industries.
19 LJJARACHAL State Industrial Development www.sidcul.com. sidcul_sidcul.com. Iloriculture, Medicinal Lerbs and aromatic Lerbs etc. -
Corporation ol LttarancLal processing, Loney, Horticulture and Agro based
2, ew Cantt Road, industries, Iood Processing Industry, Sugar and its
DeLradun-2+8001 by products, Silk and silk products, Wool and wool
Jel: 91 -135-2/+3292/9/, products, Woven labrics (Excisable garments),
2/+3838 Iax: 91-135-2/+3288 Sports goods, tourism, PLarma products, Eco-
tourism, Handicralts, Bottling ol mineral water,
Hydro- Power, Iorest Products, Herbs & Spices,
Minerals, Education, Medical & HealtL Care,
Handlooms, Jea Industry, Inlormation JecLnology,
BiotecLnology,
20 ASSAM Directorate ol Industries and Lttp://industries Iood Products, Agro-Iorest based products,
Commerce, Covernment ol assam.nic.in/ Paper & Stationery, Rubber & Polymer Products,
Assam, Ldyog BLawan, CLemical & Medical Products, MacLinery & Metal
Bamunimaidam, Jools, Misc. like - SLoe PolisL,
CuwaLati /81021 JootL Paste, Water Iilter,
Jel: 91-361-25502+2 LeatLer based Products & Mineral based
Iax: 91-361-2550/1/ Industries etc.
21 ]AMML & (ov- Apr)Directorate ol Lttp://jammu dipjk_jk.nic.in
KASHMIR Inlormation ]ammu & kasLmir.nic.in
KasLmir Covernment Cld
Secretariat Mubark Maudi
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Complex, ]ammu-180001
Jel:0191-25++0/6, 25+0088,
25/8835 Iax:0191-25++6+3
(May- Cct.)
Directorate ol Inlormation
]ammu & KasLmir Covt.
Cpposite Partap Park,
AbLi Cuzar Lal CLowk,
Srinagar. Jel: 019+-2+5229+,
2+52+3/,2+81980, 2+591/2
Iax o.:019+-2+5222/
22 HIMACHAL JLe HimacLal PradesL State www.Lpsidc.nic.in Lpsidc_sancLarnet.in Iloriculture, Medicinal Lerbs and aromatic Lerbs etc. -
PRADESH Industrial Development processing, Loney, Horticulture and Agro based
Corporation, ew Himrus industries, Iood Processing Industry, Sugar and its by-
Building, Circular Road products, Silk and silk products, Wool and wool
SLimla - 1/1001 products, Woven labrics (Excisable garments), Sports
Jel: 91- 1// 262+/51/2/+ goods, tourism, PLarma products, Eco-tourism,
2625+22 Iax: 91- 1// 262+2/8 Handicralts, Bottling ol mineral water, Automobile
Manulacturing units, Cold Storage Lnits, lruits/
vegetables/ spice based wineries, production ol
ciders/ ale, Sericulture/ Landlooms/ KLadi
industry, Electronic units etc.
32
CHAPTER - 3
TAX INCENTIVES FOR NON-
RESIDENTS
TAX INCENTIVES FOR NON-RESIDENTS
BESIDETIAL STATLS ICB TAX PLBPCSES
In India, as in many otLer countries, tLe cLarge ol income-tax and tLe scope ol taxable income varies witL
tLe lactor ol residence. JLere are two categories ol taxable entities viz. (1) Residents and (2) on-Residents.
Residents are lurtLer classilied into two sub-categories (i) Resident and ordinarily Resident and (ii) Resident
but not Crdinarily Resident. JLe law prescribes two alternative tecLnical tests ol residence lor individual
taxpayers. EacL ol tLe two tests relate to tLe pLysical presence ol tLe taxpayer in India in tLe course ol tLe
"previous year" wLicL would be tLe twelve montLs lrom April 1 to MarcL 31.
A person is said to be "Resident" in India in any previous year il Le -
(a) is in India in tLat year lor an aggregate period ol 182 days or more, or
(b) Laving witLin tLe lour years preceding tLat year been in India lor a period ol 365 days or more, is
in India in tLat year lor an aggregate period ol 60 days or more.
JLe above provisions are applicable to all individuals irrespective ol tLeir nationality. However, as a
special concession lor Indian citizens and loreign citizens ol Indian origin, tLe period ol 60 days relerred
to in Clause (b) above, will be extended to 182 days in two cases: (i) wLere an Indian citizen leaves India
in any year lor employment outside India, and (ii) wLere an Indian citizen or a loreign citizen ol Indian
origin (RI), wLo is outside India, comes on a visit to India.
In tLe above context, an individual visiting India several times during tLe relevant "previous year"
sLould note tLat judicial autLorities in India Lave Leld tLat botL tLe days ol entry and exit are counted
wLile calculating tLe number ol days stay in India, irrespective ol Lowever sLort tLe time spent in India
on tLose two days may be.
A "on-Resident" is merely delined as a person wLo is not a "Resident" i.e. one wLo does not satisly
eitLer ol tLe two prescribed tests ol residence.
An individual, wLo is delined as Resident in a given linancial year is said to be "ot Crdinarily Resident"
in any previous year il Le Las been a on-Resident in India nine out ol tLe 10 preceding previous years
or Le Las during tLe seven preceding previous years been in India lor a period ol, or periods amounting
in all to, /29 days or less.
Jill 31st MarcL, 2003, "ot Crdinarily Resident" was delined as a person wLo Las not been resident in
India in nine out ol 10 preceding previous years or Le Las not during tLe seven preceding previous
years been in India lor a period ol, or periods amounting in all to, /30 days or more.
TAX EXEMPTICS IBCM ICCME TAX
Income lrom tLe lollowing investments made by RIs/PICs out ol convertible loreign excLange is
totally exempt lrom tax:
(a) Deposits in under mentioned bank accounts
(i) on Resident External Rupee Account (RE)
(ii) Ioreign Currency on Resident Account (ICR)
36
(b) Lnits ol Lnit Jrust ol India and specilied mutual lunds, otLer specilic securities, bonds and savings
certilicates (subject to conditions prescribed under tLe Income-tax laws and regulations).
(c) Dividend declared by Indian company.
(d) Long term capital gains arising lrom transler ol equity sLares in a company and/or equity oriented
scLemes ol Mutual Iunds, wLicL are subject to Securities Jransaction Jax.
It sLould be noted tLat tLe tax exemptions relating to RE bank deposits will cease immediately upon tLe
RI/PIC becoming a resident in India wLereas tLe interest on ICR bank deposits will continue to be tax
lree as long as tLe RI maintains tLe status ol Resident but ot Crdinarily Resident or until maturity,
wLicLever is earlier.
TAX EXEMPTICS IBCM WEALTH TAX
WLere an RI/PIC returns to India lor permanent residence, tLe money and tLe value ol assets brougLt by
Lim into India and tLe value ol assets acquired by Lim out ol sucL money witLin one year immediately
preceding tLe date ol Lis return and at any time tLerealter are totally exempt lrom wealtL tax lor a period ol
seven years alter return to India.
JLe above exemption may not Lave mucL relevance now since tLe Iinance Act 1992 Las considerably
reduced tLe scope ol wealtL tax. WitL ellect lrom 1st April, 1993, wealtL tax is being levied only on non-
productive assets like urban land, buildings (except one Louse property), jewellery, bullion, veLicles, casL
over Rs.50,000/- etc. JLe current rate ol wealtL-tax is 1% on tLe aggregate market value ol cLargeable
assets as on 31st MarcL every year in excess ol Rs.1.5 million.
However, it may be noted tLat Rls are also liable to pay wealtL tax il tLe market value ol taxable assets as
on 31st MarcL exceeds Rs l.5 million.
TAX EXEMPTICS IBCM CIIT TAX
Cilt Jax Act, 1958 Las been repealed witL ellect lrom 1st Cctober, 1998 and as sucL, Cilt Jax is not
cLargeable on any gilts made on or alter tLat date.
WitL regard to gilts ol loreign excLange or specilied assets made by Rls to tLeir relatives in India, it sLould
be noted tLat
1. Cilts made by an RI/PIC to Lis or Ler spouse, minor cLildren or son's wile will involve clubbing ol
income and wealtL in tLe Lands ol tLe donor-RI/ PIC.
2. In tLe case ol gilts to minor cLildren tLe clubbing ol income, as above, will cease upon sucL cLildren
attaining tLe age ol 18 years.
3. JLe clubbing provisions will apply, in case ol gilt to spouse or son's wile in India, only to tLe lirst-stage
ol income lrom tLe original gilt. Second-stage income arising lrom investment ol tLe income lrom tLe
original gilt is not clubbed and tLis will constitute tLe separate wealtL/income ol tLe donee- spouse.
Cenerally, tLe income ol minor cLildren, lrom any source (including income lrom gilts lrom parents) is
clubbed witL tLe income ol tLe parent wLose total cLargeable income is greater.
CtLer matters to be noted regarding gilts are:
1. All gilts received by residents lrom Rls/PlCs may be subject to tLe tax autLorities requiring tLe
recipient to provide evidence as regards tLe identity and linancial capacity ol tLe donor and
genuineness ol tLe gilt.
2. Lnder tLe Ioreign ExcLange Management Act, 1999 no approval lrom Reserve Bank ol India
(RBI) is necessary lor tLe resident donee to Lold gilted immovable property outside India provided
tLe said property is gilted by a person resident outside India. Ceneral permission, subject to certain
conditions, is granted by RBI lor tLe resident donees to Lold loreign moveable properties sucL as
sLares and securities gilted by RI/PIC donors.
3. JLe Income Jax Act Las now provided tLat any sum ol money exceeding Rs.25, 000 received
witLout consideration (i.e., gilt) by an individual lrom any person on or alter 1st September, 200+,
tLe wLole ol sucL sum will be cLargeable to income-tax in tLe assessment ol recipient (i.e., donee)
under tLat Lead "Income lrom otLer sources" lor and lrom assessment year 2005-06 and onwards.
However, tLe above provisions will not apply to any sum ol money (gilt) received
(a) lrom any relative, or
(b) on tLe occasion ol tLe marriage ol tLe individual, or
(c) under a will or by way ol inLeritance, or
(d) in contemplation ol deatL ol tLe payer.
JLe term "Relative" is delined as:
(1) spouse ol tLe individual,
(2) brotLer or sister ol tLe individual,
(3) brotLer or sister ol tLe spouse ol tLe individual,
(+) brotLer or sister ol eitLer ol tLe parents ol tLe individual,
(5) any lineal ascendant or descendant ol tLe individual,
(6) any lineal ascendant or descendant ol tLe spouse ol tLe individual, and
(/) spouse ol tLe person relerred to in (2) to (6).
Scopc of Bcccipts
As per plain reading ol tLe provision, any receipt witLout consideration, save exclusions, wLetLer
capital or otLerwise, may be considered as income.
Similar receipts by any person (sucL as a partnersLip lirm, a company, and Association ol Persons
ACP etc.), otLer tLan an individual or a Hindu Lndivided Iamily, would not constitute income in
its Lands.
JLe provision would apply to an individual irrespective ol Lis residential status. Accordingly, any
receipt in India by a non-resident ol tLe nature discussed above would be considered as income in
Lis Lands.
TAX INCENTIVES FOR NON-RESIDENTS
38
Cilts on occasion otLer tLan marriage, lor example, birtLday, marriage anniversary and otLer
social occasions, religious ceremonies etc., would be taxable as income. Cilts received on tLe occasion
ol tLe marriage ol tLe individual, irrespective ol any limit, (but witLin reasonable limits) would not
constitute income.
JLe receipts sLould be in tLe lorm ol money. Accordingly, any gilt in kind would not be taxable.
JLe receipts must be witLout consideration, implying in tLe nature ol gilt.
CHAPTER - 4
OTHER INVESTMENT
OPPORTUNITIES IN INDIA
4.1 SHABES AD SECLBITIES
Portfolio Invcstmcnt Schcmc for BIs
ScLedule 2 and 3 ol tLe otilication o. IEMA 20/2000 RB contains provisions relating to Portlolio
Investment by RIs. CCBs are not allowed to make lresL investments in India under tLe Portlolio Investment
ScLeme vide otilication o. IEMA +6 dated 29tL ovember 2001. IurtLer, in September 2003, RBI Las
banned CCBs lrom investing in any manner in India. In lact, tLe category ol CCB Las been abolisLed.
However, tLey can continue to Lold and sell sLares purcLased belore 29tL ovember 2001.
Portlolio investment is covered by general permission subject to lollowing condition/provisions.
(i) Investment is permitted on repatriation as well as non-repatriation basis.
(ii) PurcLases, sale ol sLares (Prelerence and Equity) and/or convertible debentures are covered.
(iii) PurcLase/sale is done tLrougL a registered broker ol a recognised stock excLange.
(iv) Cne bank brancL must be designated by RIs and all purcLase/sale must be routed tLrougL tLat
designated bank brancL only.
(v) All transactions ol sales and purcLase must be delivery based. Speculative transactions are not allowed.
(vi) Mode ol investment may be in any ol tLe lollowing ways:
(a) Ior investment on Repatriation basis
- inward remittances tLrougL normal banking cLannels
- out ol ICR/RE account.
(b) Ior investment on non-repatriation basis
Besides tLe above two, investment can be made out ol RC account.
(vii) Ceiling on Investment
(a) Per investor (EacL RI)
- 5% ol tLe paid-up value ol sLares ol an Indian Company on botL repatriation and non-
repatriation basis.
- 5% ol tLe value ol eacL issue ol convertible debenture ol an Indian Company on botL
repatriation and non-repatriation basis.
(b) Per investee Company
(Jotal Lolding by all RIs put togetLer on botL repatriable as well as non-repatriable basis.)
10% ol paid-up value ol sLares ol an Indian Company.
OTHER INVESTMENT OPPORTUNITIES IN INDIA
42
10% ol paid-up value eacL series ol convertible debenture.
JLis ceiling ol 10% could be increased to 2+%, il tLe Ceneral Body ol concerned Indian Company passes a
special resolution to tLat ellect.
(viii) Repatriation ol Sale/Maturity Proceeds
(a) Sales proceeds ol Investment Leld on repatriation basis can be credited to RE/ICR/RC
account alter payment ol applicable taxes.
(b) Il investment is on non-repatriation basis, credit ol sale/maturity proceeds is permitted in RC
account.
(ix) Existing CCBs (i.e. prior to Sep 16, 2003) must intimate tLe designated bank brancL immediately on
tLe Lolding/interest ol RIs in tLe CCB becoming less tLan 60%.
(x) RIs are allowed to enter into lorward contracts to Ledge tLeir investment made in India.
(xi) RI is also permitted to invest in excLange traded derivatives contracts approved by SEBI lrom time to
time out ol Lis Rupee lunds Leld in India on on-Repatriable basis subject to tLe limits prescribed by
SEBI.
(xii) RIs can also invest witLout limit on repatriable basis in Covernment dated securities, treasury bills,
units ol domestic mutual lunds, bonds issued by PSLs, sLares in Public Sector Enterprises wLicL are
being disinvested by Covernment. JLey can also invest witLout limit on non-repatriable basis in
Covernment Dated Securities, Jreasury Bills, units ol Domestic Mutual Iunds, units ol Money Market
Mutual Iunds. However, RIs are not permitted to make Investments in Small Savings ScLemes
including PPI.
4.2 LCAS & CVEBDBAITS
Borrowing in Iorcign Exchangc by Bcsidcnts
JLere is general permission to borrow up to LS$ 250,000 or its equivalent in loreign excLange on a repatriable
basis by an individual Resident lrom Lis close relatives (as delined in Section 6 ol tLe Companies Act)
resident outside India subject to -
JLe loan is lree ol interest
JLe minimum maturity period ol tLe loan is 1 year.
JLe amount ol loan is received by inward remittance in lree loreign excLange tLrougL normal
banking cLannels or by debit to tLe RE/ICR account ol tLe non-resident lender.
on-Bcpatriablc Borrowing in Bupccs by Bcsidcnts
A resident, not being a company incorporated in India, may borrow in rupees on non-repatriation basis lrom
RI or PIC subject to:
JLe term ol tLe loan sLall not exceed 3 years.
JLe loan Las to be utilised lor meeting tLe borrower's personal requirement or lor Lis business purposes and
under no circumstances be used lor relending or lor investment in sLares, securities or immovable property.
JLe rate ol interest sLall not exceed 2% over tLe bank rate prevailing on tLe date ol availing ol loan.
Loan in Bupccs against Sharcs / Immovablc Propcrty
AutLorised Dealers (ADs) may grant loan in rupees to RIs against tLe security ol sLares or immovable
property in India lor personal or business purposes and Lousing loans against tLe security ol Louses/llats to
be acquired lor residential accommodation in India. Restriction Las been removed on tLe use ol loan and
allows it to be applied lor any purpose otLer tLan tLe basic embargoes on cLit lunds, idLi companies,
agricultural and or plantation activities, etc. It cannot also be applied lor trading in Jranslerable Development
RigLts (JDRs) or investment in capital market including margin trading and derivatives.
JLe loan is non-repatriable. Hence tLe loan amount cannot be credited to tLe RIs RE/ICR accounts.
JLe repayment ol tLe loans sLould be by direct remittance lrom abroad or by way ol debit to tLe RE /
ICR account or by way ol sale ol sLares and immovable property.
Loan against BE, ICB & BC
Since tLe account Lolder can witLdraw lrom RE saving deposits at any time, banks sLould not mark any
type ol lien, direct or indirect, against tLese deposits. ADs may grant loans to tLe account Lolder against tLe
security ol term deposits. JLe repayments ol tLe loan may be made eitLer by adjusting tLe deposit against
tLe loan or by lresL remittances lrom abroad.
44
Loan can be given to account Lolder lor tLe acquisition ol llat / Louse in India against RE or ICR lixed
deposits on repatriable basis, provided tLe amount to be repatriated is governed by Ioreign ExcLange
Management Regulation (Acquisition and Jransler ol Immovable Property in India).
A brancL outside India ol an AutLorised Dealer may grant loan against tLe security ol RE/ICR deposit.
AutLorised Dealers may grant lorex loans in India against security ol ICR to tLe account Lolder only and
not to tLird parties, witL approval ol board ol bank, provided tLe loan period does not exceed tLe maturity
period ol tLe deposit and tLe loan is not used lor investment in India. JLe document sLould be executed by
tLe deposit Lolder Limsell and not by Lis Power ol Attorney Lolder.
JLe repayment ol tLe loan may be made eitLer by adjusting tLe deposit against tLe loan or by lresL remittances
lrom abroad. Repayment may be made by using tLe RC account also. However in tLat case, interest Las to
be cLarged at lull commercial rate in lorce.
Loan to Third Partics in India
ADs may grant loans to Residents against tLe collateral ol RE deposits provided tLere is no direct or
indirect loreign excLange consideration to tLe RI depositor lor agreeing to pledge Lis deposits and tLe loan
is to be used lor personal purposes ol Resident or lor carrying on business activities otLer tLan agricultural or
plantation activities.
Changc in thc Bcsidcntial Status of Borrowcr
An AD may allow continuance ol loan/overdralt granted to a Resident wLo subsequently becomes a Resident
Cutside India il Le is satislied about tLe reasons to continue tLe loan or overdralt. JLe repayment sLall be
made eitLer by inward remittance lrom outside India tLrougL normal banking cLannels or lrom tLe lunds
Leld in tLe on- Resident related accounts ol tLe borrower.
Tcmporary Cvcrdrawings
AutLorised Dealers may allow overdrawings in RE savings bank accounts, up to a limit ol Rs 50,000. SucL
overdrawings togetLer witL tLe interest sLould be cleared witLin 2 weeks, out ol inward remittances tLrougL
normal banking cLannels or by transler ol lunds lrom otLer RE/ICR accounts.
Changc in thc Bcsidcntial Status of thc Lcndcr
In case a rupee loan was granted by a Resident to anotLer Resident and tLe lender subsequently becomes a
non-resident, tLe repayment ol tLe loan by resident borrower sLould be made by credit to tLe RC account
ol tLe lender.
4.3 IMMCVABLE PBCPEBTY
Lnder IEMA regulations a loreign citizen wLo is resident in India can purcLase Immovable Property (IP) in
India witLout any approval lrom RBI. He is also not required to lile any declaration at tLe time ol purcLase
ol sucL IP.
Citizens ol eigLt countries, namely, (Pakistan, BangladesL, Sri Lanka, AlgLanistan, CLina, Iran, epal. or
BLutan (wLetLer resident in India or not) are proLibited lrom acquiring or translerring any IP in India witLout
prior approval ol tLe RBI. However, sucL a proLibition is not applicable to IP acquired on lease lor a period
not exceeding live years.
Ccncral Prohibition
Investment in agricultural property, plantation and larmLouse is proLibited lor all classes ol persons resident
outside India, be it RIs/CCBs/ loreign citizens or otLer loreign entities.
Tablc-1 : Transaction of Immovablc Propcrty
Indian Citizcn Bcsidcnt
Cutsidc India may
RI PIC Resident ote
PurcLase Property Irom Yes Yes Yes
Sell Property Jo Yes Yes Yes
Receive Cilt Irom Yes Yes Yes
Cive Cilt Jo Yes Yes Yes
Agricultural Propcrty
PurcLase Property Irom o o o
Sell Property Jo o o Yes
Receive Cilt Irom o o o
Cive Cilt Jo o o Yes
Pcrson of India Crigin who is
Bcsidcnt Cutsidc India may
PurcLase Property Irom Yes Yes Yes Iorex or RI
Sell Property Jo o o Yes Bank Accounts
Receive Cilt Irom Yes Yes Yes
Cive Cilt Jo Yes Yes Yes
Agricultural Propcrty
PurcLase Property Irom o o o
Sell Property Jo o o Yes Citizen ol India
Receive Cilt Irom o o o
Cive Cilt Jo o o Yes Citizen ol India
All situations not lalling in tLe category ol tLe general permissions, including requests lor acquisition ol
agricultural land by any RCI may be made to JLe CLiel Ceneral Manager, Reserve Bank ol India, ExcLange
Control Department, Ioreign Investment Decision (III), Mumbai-+00 001 (India).
46
Bcmittancc of Bcnt
RIs/PICs can lreely rent out tLeir immovable property, wLetLer purcLased tLrougL application ol lorex or
otLerwise, witLout seeking any permission lrom tLe RBI. JLe rental income being a current account transaction
is repatriable outside India, only il proper tax is paid or provided lor.
WLere tLe Louse is purcLased tLrougL Lousing linance and tLe Louse is rented out, tLe entire rental income,
even il it is more tLan tLe prescribed instalment, sLould be adjusted towards repayment ol tLe loan. Il tLe
rental income is less tLen tLe prescribed instalment, tLe borrower sLould remit tLe amount ol tLe extent ol
tLe sLortlall lrom abroad or pay it out ol Lis RE, ICR or RC account in India.
(Bcfcr: BBI Mastcr Circular o. /02/2006-07 at Anncxurc VII )
4.4 BEMITTACE IACILITIES ICB BIs/PICs
Remittance ol capital assets in India Leld by a person wLetLer resident in or outside India would require
approval ol tLe Reserve Bank except to tLe extent provided in tLe Ioreign ExcLange Management Act, 1999
(IEMA) or Rules or Regulations made under tLe Act.
1. Bcmittancc of asscts by BIs/PICs
RI/PIC may remit upto $1,000,000 per year out ol tLe balance in Lis on Resident (Crdinary)
account/sale proceeds ol assets (inclusive ol inLeritance/settlement).
2. Bcpatriation of salc procccds of rcsidcntial propcrty purchascd by BIs/PICs
out of forcign cxchangc
JLere is no lock-in period lor sale ol residential property purcLased by RI/PIC out ol loreign excLange.
However, repatriation ol sale proceeds ol residential property purcLased by RI/PIC out ol loreign excLange
is restricted to not more tLan two sucL properties.
Remittance representing relund ol application/earnest money on account ol non allotment is permitted
togetLer witL interest il tLe original payment was made out ol RE/ICR account ol tLe account Lolder
or tLe remittance was lrom outside India tLrougL normal banking cLannels.
3. Bcmittancc of currcnt incomc
Remittance ol current income like rent, dividend, pension, interest etc. ol RIs /PICs wLo do not maintain
RC Account is lreely allowed on tLe basis ol appropriate certilication by a CLartered Accountant certilying
tLat tLe amount proposed to be remitted is eligible lor remittance and tLat applicable taxes Lave been paid/
provided lor.
RIs/PIC Lave tLe option to credit tLe current income to tLeir on-Resident (External) Rupee account
provided tLe autLorized dealer is satislied tLat tLe credit represents current income ol tLe non-resident
account Lolder and income tax tLereon Las been deducted/provided lor.
4. Intcrnational Crcdit Cards
Banks may issue International Credit Cards to RIs/PICs witLout prior approval ol tLe RBI.
(Bcfcr: BBI Mastcr Circular o. /04/2006-07 at Anncxurc VIII)
48
4.5 PHILATHBCPY BY C CCVEBMETAL CBCAISATICS
(CCs)
Introduction
Any organisation working lor a social, cultural, economic, educational or religious cause is termed as an
CC. CCs Lave made lavorable indents to needy sections ol Indian society at par witL a constantly
cLanging socio-economic climate. CCs Lave reacLed out to all sections ol society including women,
cLildren, pavement dwellers, unorganised workers, youtL, slum-dwellers and landless labourers.
An CC can be lormed under various legal identities:
(i) Society registered under Societies Registration Act, 1860.
(ii) Jrust (Iormed under tLe Jrust deed and registered witL Income Jax AutLority.)
(iii) Limited company incorporated under section 25 ol tLe Companies Act, 1956
SCCIETY
A Society is lormed wLen people come togetLer to do sometLing witL some common purpose wLicL is legal
and uselul lor otLers. A society sLould generally not get into prolit making activities.
TBLST
What is a Charitablc Trust:
A cLaritable trust is a legal entity wLicL can be set up by anyone wLo Las decided to commit tLemselves in
principle to setting aside some ol tLeir assets or income lor cLaritable causes. Jrusts are completely
independent ol government or any external control. JLe main obligation is to work witLin tLe cLaritable
purposes and tLe powers set out in tLe Jrust Deed.
Icaturcs of a Trust
A Jrust is created wLen a donor attacLes a legal obligation to tLe ownersLip ol certain property based on Lis
conlidence placed in and accepted by tLe donee or trustee, lor tLe benelit ol anotLer.
JLe persons wLo intends to create tLe trust witL regard to certain property lor a specilied beneliciary and
wLo places Lis conlidence in anotLer lor tLis arrangement is called tLe AutLor ol tLe Jrust, tLe person wLo
accepts tLe conlidence is called tLe Jrustee, tLe person wLose benelit tLe conlidence is accepted is called
tLe Beneliciary, tLe subject matter ol tLe trust is called Jrust Property.
CLarity is a matter lor State control, so dillerent States ol India Lave tLeir own legislation in tLe lorm ol
Jrusts or Endowment Acts to govern and regulate public cLaritable CCs.
Trustccs control thc Trust
JLe Jrustees control tLe trust's assets and decide Low tLe income (and capital) ol tLe trust is to be distributed,
and ensure tLat it is in line witL tLe cLaritable purposes ol tLe trust.
JLe autLor ol tLe trust must indicate witL reasonable certainty tLe lollowing:
Intention to create trust
Purpose ol tLe trust
Beneliciaries ol tLe trust, and
JLe trust property
A public trust is ol permanent and indelinite cLaracter. A public trust benelits tLe public at large or at least
a section ol tLe community.
JLe property lorming subject matter ol tLe trust must be capable ol being translerable to tLe beneliciary -
tLus property wLicL is inalienable by virtue ol public policy or statute does not lorm valid subject matter lor
a trust. In terms ol section 8 ol tLe Indian Jrusts Act, tLere cannot be as a trust ol a benelicial interest under
a trust i.e. tLere cannot be a trust upon a trust.
Ilcxibility in naming your Trust
You can cLoose wLat to call your trust - your lamily name, or tLat ol an Lonorable person. JLe organisation
can also be called a "loundation" or "cLarity" or any similar terms as tLese words are practically intercLangeable
in a legal sense.
C - PBCIIT CCMPAY
on - Prolit Company is identical to an ordinary company in all respects except tLat it is not establisLed lor
prolit and commercial gain. It is also called a Section 25 Company and is a voluntary association ol people,
registered under tLe Indian Companies Act, 1956.
Cbjectives ol a non-prolit company can include promotion ol commerce, art, science, religion, cLarity or
any otLer uselul object. Prolits are applied lor promoting only tLe objects ol tLe company and no dividend is
paid to its members (Section 25 (1) (a) and (b) ol tLe Companies Act, 1956). A non-prolit company may be
public or private. Il tLe non-prolit company is a private company a minimum ol only two members are
required to lorm it. However, il tLe non-prolit company is lor a public purpose, tLen a minimum ol seven
are needed. A 'section 25 company' is eligible lor certain exemption lrom provisions ol law and concessional
rate ol lees etc.
ICBEIC CCTBIBLTIC
Prior Pcrmission always
JLe Ioreign Contribution (Regulation) Act, 19/6 (ICRA) requires all Indian CCs tLat receive loreign
contributions to receive clearance lrom tLe Ministry ol Home Allairs, in tLe lorm ol eitLer permanent
ICRA registration or prior permission on a case-to-case basis.
JLe procedure lor obtaining prior permission lrom tLe ICRA is as lollows:
1) Apply in Iorm IC - 1A
Applicant (s) to lile Iorm IC - 1A along witL required documents
50
Handbook for Overseas Indians
Ministry of Overseas Indian Affairs
2) FCRA permission
Within 90 days thereafter, you will receive a registered letter from the Department either granting the
permission or stating rejection of your request.
3) Appeal against rejection
You can re-apply after ascertaining and rectifying objections on your file. You can also file an appeal in
the High Court within 60 days of the date of letter.
4) Applying again
One party can apply for prior permission more then once if needed - considering that projects are
varied and or are under different agencies.
When FCRA permission is not needed:
Prior permission from the FCRA is not required for receiving amounts in the following forms:-
(a) Salary, wages or other remuneration either to individual or payment for business purposes.
(b) Payment for international trade or for business transacted by him outside India.
(c) By way of a gift or presentation received as member of any Indian delegation.
(d) Gift not exceeding Rs. 8,000/ - per annum.
Profit-oriented organisations are not covered by FCRA.
Bank Account for foreign funds
An NGO is required to open and use bank account exclusively for foreign funds under FCRA.
Income Tax Benefits on foreign funds
1. Benefits for the NGO
Incomes received by any religious or charitable trust or institution registered with the income tax
authorities, is not taxable as long as this income is applied for the objects of the organisation.
2. Benefits to Donors :
The donors are also entitled to get an exemption on their donation where exemption can be 50% or
100% depending on the category of organisations.
Illustrativc cxamplc of CCs handling forcign moncy/matcrials:
Sponsorships by forcign partics:-
An occasion can arise wLere a moneyed loreign person agrees to kindly sponsor an CCs annual
cLarity lestival and tLe loreign lunds are lorwarded directly to tLe printers lor printing ol catalogues lor
tLis lestival by tLem, tLe CC accepting tLe catalogues Las accepted loreign contribution and is under
an obligation to intimate tLe Central Covernment. Il tLe CC does not Lave requisite ICRA registration
or prior permission it cannot accept tLe sponsorsLip in tLe lirst place.
Iorm IC-3 is to be liled at tLe end ol eacL linancial year (by 31st ]uly). Iiling required to be done
annually till sucL time tLe ICRA lunds are exLausted.
Documents to attacL witL Iorm IC-8 - AttacL one copy ol eacL ol tLe lollowing documents
1. Certilicate lrom tLe concerned District Collector/Department ol State Covernment/Ministry or
Department ol Central Covernment,
2. Activity report lor past tLree years,
3. Audited Statements ol Account lor past tLree years,
+. List ol state or districts ol locus ol work,
5. ote on socio-economic background ol tLe beneliciaries and ol tLe region to be covered,
6. WLere CC is a society, tLen also attacL certilied copy ol Registration Certilicate issued by tLe
Registrar ol Societies,
/. Certilied copy ol registered Jrust Deed (il CC is a Jrust),
8. Certilied copies ol (a) Memorandum and Articles ol Association, (b) registration certilicate issued
by tLe Registrar ol Companies, (c) section 25 license issued by tLe Regional Director, Department
ol Company Allairs (il CC is a non-prolit company),
9. ICRA does not allow mixing up ol Indian lunds and ICRA lunds. JLis means botL lunds are to be
maintained separately.
Scholarships from forcign sourccs
Indians receiving a loreign scLolarsLip or stipend lrom loreign source Lave to intimate tLe Central Covernment
ol tLe amount, propose, source and intervals ol sucL payment.
CHAPTER - 5
OTHER IMPORTANT
MATTERS
5.1 CVEBSEAS CITIZESHIP CI IDIA (CCI)
CCI SCHEME IS CPEBATICAL IBCM 02.12.2005
JLe Constitution ol India does not allow Lolding Indian citizensLip and citizensLip ol a loreign country
simultaneously. Based on tLe recommendation ol tLe HigL Level committee on Indian Diaspora, tLe
Covernment ol India decided to grant Cverseas CitizensLip Cl India( CCI ). JLe scLeme is operational
lrom December 2, 2005. CCI Las been introduced by statute as a new category ol citizensLip to lacilitate
lile-long visa, lree travel to India and certain economic, educational and cultural benelits. JLis is not to be
construed as 'dual citizensLip' since it does not conler political rigLts. Any Cverseas Indian applicant wLo is
comlortable witL Lis present citizensLip status in tLe country ol Lis residence can apply lor CCI. Jill Cctober
2006, about 65,000 CCI documents Lave been issued, mostly to overseas Indians in tLe LSA, Canada, LK,
Australia and ew Zealand.
Persons ol Indian Crigin ( PICs) ol certain category, as specilied below, wLo migrated lrom India and
acquired citizensLip ol a loreign country otLer tLan Pakistan and BangladesL, are eligible lor grant ol CCI.
Registered CCIs sLall be entitled to lollowing benelits:
(i) Multiple entry, multi-purpose lile long visa to visit India,
(ii) Exemption lrom registration witL Police autLorities lor any lengtL ol stay in India, and
(iii) Parity witL RIs in linancial, economic and educational lields except in tLe acquisition ol agricultural
or plantation properties.
Persons registered as CCI Lave not been given any voting rigLts, election to Lok SabLa / Rajya SabLa /
Legislative Assembly / Council, Lolding Constitutional posts sucL as President, Vice President, ]udge ol
Supreme Court / HigL Court etc.
Any lurtLer benelits to CCIs will be notilied by tLe Ministry ol Cverseas Indian Allairs (MCIA) under
section /B (1) ol tLe citizensLip Act, 1955.
A person registered as CCI lor live years is eligible to apply lor grant ol Indian citizensLip under section 5(1)
(g) ol tLe CitizensLip Act, 1955 il Le/sLe Las been residing in India lor one year out ol tLe live years belore
making tLe application.
1. Eligibility Critcria:
A loreign national, wLo was eligible to become citizen ol India on 26.01.1950 or was a citizen ol India on or
at anytime alter 26.01.1950 or belonged to a territory tLat became part ol India alter 15.08.19+/ and Lis/Ler
cLildren and grand cLildren.
2. Application form and proccdurc:
A lamily consisting ol spouses and upto two minor cLildren can apply in tLe same lorm i.e. Iorm XIX. JLe
lorm can be liled online or downloaded lrom tLe website www.mha.nic.in.
OTHER IMPORTANT MATTERS
56
Application Las to be submitted in duplicate along witL tLe lollowing documents:
1. Prool ol present citizensLip.
2. Evidence ol sell or parents or grand parents,
(a) being eligible to become a citizen ol India at tLe time ol commencement ol tLe Constitution, or
(b) belonging to a territory tLat became part ol India alter 15tL August, 19+/, or
(c) being citizen ol India on or alter 26tL ]anuary,1950
JLese could be:
(i) Copy ol tLe passport: or
(ii) Copy ol tLe domicile certilicate issued by tLe competent autLority, or
(iii) Any otLer prool.
3. Evidence ol relationsLip as parent / grand parent, il tLeir Indian origin is claimed as basis lor grant ol
CCI.
+. Application lee by way ol Demand Dralt (LS $ 2/5 lor eacL applicant or equivalent in local currency, LS
$ 25 or equivalent in local currency lor eacL PIC card Lolder)
5. PIC card Lolders must also submit a copy ol tLeir PIC card.
JLe application lorm completed in all respects along witL enclosures sLould be submitted in duplicate to tLe
Indian Mission / Post ol tLe country ol applicant's citizensLip or wLere Le/sLe is not in tLe country ol
citizensLip to tLe Indian Mission / Post ol tLe country in wLicL Le / sLe is ordinarily resident. Il tLe
applicant is in India, Le / sLe can apply to tLe Ioreigners Regional Registration Cllicer (IRRC) at DelLi,
Mumbai, Kolkata or Amritsar or CLiel Immigration Cllicer (CHIC) CLennai or to tLe Lnder Secretary, CCI
Cell, CitizensLip Section, Ioreigners Division, Ministry ol Home Allairs (MHA), ]aisalmer House, 26
MansingL Road, ew DelLi - 110011.
3. Proccdurc for granting rcgistration:
Alter Preliminary scrutiny, il tLere is no adverse inlormation available against tLe applicant, tLe Indian
Mission / Post sLall register a person as CCI witLin 30 days ol application and tLe case sLall be relerred to
MHA lor post verilication ol tLe antecedents ol tLe applicant. Il during tLe post verilication, any adverse
inlormation comes to tLe knowledge ol tLe MHA, tLe registration as CCI already granted by tLe Indian
Mission / Post sLall be cancelled by an order under Section /D ol tLe CitizensLip Act, 1955.
Alter preliminary scrutiny, il tLere is any adverse inlormation against tLe applicant, prior approval ol MHA
sLall be required belore grant ol registration. MHA may approve or reject tLe grant ol registration witLin 120
days lrom tLe date ol tLe receipt ol tLe application. Il tLe grant ol registration as CCI is approved by MHA,
tLe Indian Mission / Post sLall register tLe person as CCI.
Il tLe application is liled in India, registration sLall be granted by MHA by lollowing tLe above
procedure.
Alter grant ol registration, a registration certilicate in tLe lorm ol booklet will be issued and a multiple entry,
multi-purpose lile long CCI 'L' Visa Sticker will be pasted on tLe loreign passport ol tLe applicant.
4. CCI for PIC card holdcrs:
PIC card Lolders wLo are otLerwise eligible lor registration as CCI may apply in tLe same Iorm i.e. Iorm
XIX and tLey will be considered lor grant ol registration in tLe same manner as otLer applicants. PIC card
Lolders Lave to pay a lee ol LS $ 25 or equivalent in local currency instead ol LS $ 2/5 lor normal applicant.
PIC cardLolders will Lave to surrender Lis/Ler PIC card alter knowledge ol acceptance ol application.
5. CCI for pcrsons who havc applicd on thc carlicr prcscribcd application form:
All sucL applications will be considered lor grant ol CCI on tLe same line as in 3 above witLout seeking lresL
application and lees.
6. Canccllation of CCI rcgistration
Il it Las been lound tLat tLe registration as an CCI was obtained by means ol lraud, lalse representation or
concealment ol any material lact or tLe registered CCI Las sLown disallection towards tLe Constitution ol
India or comes under any ol tLe provisions ol Section /D ol tLe CitizensLip Act, tLe registration ol sucL
person will not only be cancelled lortLwitL but Le / sLe will also be blacklisted lor visiting India.
7. Hclp Dcsk:
Ior any clarilication/query on tLe scLeme, please visit tLe website www.mLa.nic.in. or visit tLe website ol
tLe local Indian Mission / Post or contact tLe Indian Mission / Post or CCI Cell, CitizensLip Section,
Ioreigners Division, Ministry ol Home Allairs, ]aisalmer House, 26 MansingL Road, ew DelLi - 110011.
APPLICATIC IEES
Ior application to be liled in India, an amount ol Rs. 12,650 Las to be paid lor eacL applicant by Demand
Dralt in Iavor ol " Pay and Account Cllicer (Secretariat), Ministry ol Home Allairs" payable at ew DelLi.
In case ol PIC Card Lolder, an amount ol Rs.1,150 Las to be paid.
In case ol application to be liled outside India, lor tLe amount ol lee to be paid in local currency, please visit
tLe web site ol tLe respective Indian Mission / Post.
Ircqucntly Askcd Qucstions
1. Who was cligiblc to bccomc Citizcn of India on 26.01.1950:
Any person wLo or eitLer ol wLose parents or any ol wLose grand-parents was born in India as delined in tLe
Covernment ol India Act, 1935 (as originally enacted), and wLo was ordinarily residing in any country
outside India was eligible to become citizen ol India on 26.01.1950.
58
2. Which tcrritorics bccamc part of India aftcr 15.08.1947 and from what datc:
JLe territories wLicL became part ol India alter 15.08.19+/ are:
(i) Sikkim lrom 26.0+.19/5
(ii) PondicLerry lrom 16.08.1962
(iii) Dadra & agar Haveli lrom 11.08.1961
(iv) Coa, Daman and Diu lrom 20.12.1961
3. Can thc spousc of thc cligiblc pcrson apply for CCI
Yes, il Le/sLe is eligible in Lis /Ler own capacity.
4. Can childrcn of parcnts, whcrcin onc of thc parcnts is cligiblc for CCI, can apply for CCI:
Yes.
5. Can application form bc fillcd and submittcd on linc:
Yes. Part A ol tLe application lorm can be liled online at website www.mLa.nic.in.. Part B can be downloaded
and printed on computer or by Land in Block letters. Printed Part A and Part B ol tLe application lorm Lave
to be submitted to tLe Indian Mission/Post/Cllice.
6. Whcthcr applicant(s) havc to go in pcrson to submit thc application(s):
o. Application(s) can be sent by post.
7. Whcthcr thc applicant(s) havc to takc oath bcforc thc Counscl of thc Indian Mission/Post:
o. Earlier provision in tLis regard Las been done away witL.
8. Can a pcrson apply in thc country whcrc hc is ordinarily rcsiding:
Yes.
9. What arc thc conscqucnccs of furnishing wrong information or supprcssing matcrial
information:
All tLe applications will be subject to pre or post enquiry depending on wLetLer any adverse inlormation is
available or not. Il tLe Covernment comes to tLe knowledge tLat any lalse inlormation was lurnisLed or
material inlormation was suppressed, tLe registration as CCI already granted sLall be cancelled by an order
under Section /D ol tLe CitizensLip Act, 1955. JLe persons will also be blacklisted banning Lis/Ler entry
into India.
10. What is thc fcc for application for rcgistration as CCI:
LS $ 2/5 or equivalent in local currency lor eacL applicant. In case ol PIC card Lolder, LS $ 25 or equivalent
in local currency lor eacL applicant.
11. What is thc timc takcn for rcgistration as CCI:
WitLin 30 days ol tLe application, il tLere is no adverse inlormation available against tLe applicant. Il any
adverse inlormation is available against tLe applicant, tLe decision to grant or otLerwise is taken witLin 120
days.
12. If thc rcgistration as CCI is not grantcd, what amount will bc rcfundcd:
An amount ol LS $ 250 or equivalent in local currency sLall be relunded, il registration is relused. LS $ 25
is tLe processing lees, wLicL is non- relundable.
13. Will thc PIC Card holdcr bc grantcd CCI rcgistration gratis:
o. He/sLe Las to make a payment ol LS $ 25 equivalent in local currency along witL tLe application.
14. Will a scparatc CCI passport bc issucd:
o. JLe visa sticker will be pasted on tLe loreign passport. Ior tLis purpose, tLe applicant Las to send tLe
original passport to tLe Indian Mission / Post alter receipt ol tLe acceptance letter/ verilying tLe status ol
tLe application online.
15. Will a duplicatc ccrtificatc of rcgistration as CCI will bc issucd:
Yes. Ior tLis purpose, an application Las to be made to tLe Indian Mission / Post witL evidence lor loss ol
certilicate. In case ol mutilated/damaged certilicate an application Las to be made enclosing tLe same. JLe
applications in botL tLe cases Lave to be made to tLe same Indian Mission / Post wLicL issued tLe certilicate
alongwitL witL payment ol lee ol LS $ 25 or equivalent in local currency.
16. Will a ncw CCI visa stickcr bc issucd on thc ncw forcign passport aftcr thc cxpiry of thc old
passport:
Yes. Cn payment ol requisite lee, a new CCI 'L' visa sticker will be issued. However, tLe application can
continue to carry tLe old passport lor visiting India witLout seeking a new visa, as tLe visa is lor lilelong.
17. Can a pcrson holding CCI travcl to protcctcd arca/rcstrictcd arca without pcrmission:
o. He/sLe will be required to seek PAP/RAP (Protected/Restricted Area Permission) lor sucL visits.
18. Would thc Indian civil/criminal laws bc applicablc to pcrsons rcgistcrcd as CCI:
Yes. Ior tLe period CCI is living in India.
19. Can a pcrson rcgistcrcd as CCI bc grantcd Indian citizcnship:
Yes. As per tLe provisions ol Section 5(1) (g) ol tLe CitizensLip Act, 1955, a person wLo is registered as CCI
lor 5 years and residing in India lor 1 year out ol tLe alorementioned 5 year, is eligible to apply lor Indian
citizensLip.
60
20. Will CCI bc grantcd gratis to ccrtain catcgorics of pcoplc:
o.
21. Can CCI bc grantcd to forcign nationals who arc not cligiblc for CCI, but marricd to pcrsons
who arc cligiblc for CCI:
o.
22. Will forcign-born childrcn of PICs bc cligiblc to bccomc CCI:
Yes, provided one ol tLe parent is eligible to become CCI.
23. What arc thc advantagcs of CCI whcn comparcd to PIC cardholdcrs:
CCI is entitled to lile long visa lree travel to India wLereas lor PIC cardLolder, it is lor 15 years.
PIC cardLolder is required to register witL tLe local police autLority lor stay exceeding 180 days in India on
any single visit wLereas CCI is exempted lrom registration witL police autLority lor any lengtL ol stay in
India.
25. Whcthcr an CCI bc cntitlcd to apply for and obtain a normal Indian passport, which is givcn to
a citizcn of India:
o. Indian Passport is given only to Indian citizen.
26. Whcthcr nationals of commonwcalth countrics arc cligiblc for CCI:
Yes, il tLey lullil tLe eligibility criteria.
27. Can a pcrson rcnouncc CCI:
Yes. He/sLe Las to declare intention ol renunciation in Iorm XXII to tLe Indian Mission /Post wLere CCI
registration was granted. Alter receipt ol tLe declaration, tLe Indian Mission/Post sLall issue an
acknowledgement in Iorm XXII A.
5.2 PIC CABD
THE PIC CABD SCHEME
In a signilicant step towards granting dual citizensLip to Cverseas Indians, tLe Covernment approved tLe
person ol Indian origin (PIC) card scLeme to permit all sucL individuals visa-lree entry into tLe country.
Dcfinition of Pcrson of Indian Crigin (PIC)
"Person ol Indian Crigin" means a loreign citizen not being a citizen ol Pakistan, BangladesL and otLer
countries as may be specilied by tLe central government lrom time to time] il,
i. Hc/shc at any timc hcld an Indian passport,
ii. Hc/shc or cithcr of his/hcr parcnts or grand parcnts or grcat grand parcnts was born in and
pcrmancntly rcsidcnt in India as delined in tLe Covernment ol India Act, 1935 and otLer territories
tLat became part ol India tLerealter provided neitLer was at any time a citizen ol any ol tLe specilied
countries, or
iii. Hc/shc is a spousc of a citizcn of India or a pcrson of Indian origin covcrcd undcr (i) or (ii)
abovc.
Proccdurc for Application for PIC Card
JLe card would be issued to eligible applicants tLrougL tLe concerned Indian Embassies/ HigL Commission
/ Consulates (Annexure II) and lor tLose staying in India on a long term visa, lrom tLe concerned Ioreigners
Regional Registration Cllicer (DelLi, Mumbai, Kolkata, CLennai) and also lrom tLe Ministry ol Home Allairs,
Ioreigners Division, Lok ayak BLawan, KLan Market, ew DelLi-110003.
JLe lees lor tLe card, wLicL will Lave a validity ol 15 years, would be Rs.15, 000/- and lor tLe minor (below
18 years), tLe lees is Rs./,500/-.
Bcncfits of Pcrson of Indian Crigin (PIC) Card Schcmc
Besides making tLeir journey back to tLeir roots simpler, easier and smootLer, tLis scLeme entitles tLe PICs
to a wide range ol economic, linancial, educational and cultural benelits.
JLe benelits envisaged under tLe scLeme include:-
(i) o requirement ol visa to visit India,
(ii) o separate "Student Visa" or "Employment Visa" required lor admission in colleges/ institution or lor
taking up employment respectively,
(iii) o requirement to register witL tLe Ioreigners Registration Cllicer il continuous stay does not exceed
180 days. Registration is required to be done witLin a period ol 30 days alter expiry ol 180 days,
(iv) Parity witL on-Resident Indians in respect ol lacilities available to tLe latter in economic, linancial,
educational lields, etc. JLese lacilities will include:
62
(a) Acquisition , Lolding, transler and disposal ol immovable properties in India except lor agricultural/
plantation properties,
(b) Admission ol cLildren in educational institution in India under tLe general category quota lor
RIs-including medical/engineering colleges, IIJs, IIMs etc.,
(c) Various Lousing scLemes ol Lile Insurance Corporation ol India, State Covernment and otLer
Covernment agencies,
(d) Special counters at tLe immigration cLeck post lor speedy clearance.
(v) All luture benelits tLat would be extended to RIs would also be made to PIC Card Lolders
(vi) JLey Lowever cannot enjoy political rigLts in India.
Issuc of Cratis PIC Card
Cratis PIC Card may be issued to an exceptionally eminent person ol Indian Crigin, wLo plays an important
role in building bridges between India and tLe country ol Lis/Ler adoption, il Le/sLe expresses a desire to
obtain tLe PIC Card.
Duplicatc PIC Card
Duplicate PIC Card can be obtained in case ol loss, etc., on a request supported by IIR and otLer documents.
A duplicate PIC Card sLall be issued on depositing a lee ol LS $ 100. Duplicate PIC Cards will be issued by
tLe same ollice tLat issued tLe original one.
PIC cards issucd carlicr as pcr PIC Card Schcmc for LS $1000 will continuc to rcmain valid without
any cxtra fcc, with validity cxtcndablc by 10 morc ycars.
Comparativc chart on BI/PIC/PIC CABD HCLDEBS/CCI
BI PIC PIC Card holdcr CCI
1. WLo An Indian A person wLo A person registered A person registered as
citizen wLo or wLose any as PIC card Cverseas Citizen ol
is ordinarily ol ancestors was Holder under India (CCI) under section
residing an Indian MHA's scLeme /A ol tLe citizensLip
outside India national and wLo vide otilication Act,1955
and Lolds an is presently o. 26011/+/98-I.I
Indian passport Lolding anotLer dated 19.08.2002.
country's
citizensLip/
nationality i.e.
Le/sLe is
Lolding loreign
passport
2. WLo is - - Any person wLo A loreign national, wLo
eligible at any time Leld an was eligible to become
Indian passport, or citizen ol India on
Le or eitLer ol Lis 26.01.1950 or was a
parents or grand citizen ol India on or at
parents was born in anytime alter 26.01.1950
or was permanently or belonged to a territory
resident in India as tLat become part ol
delined in government India alter 15.08.19+/
ol India Act, 1935 and Lis/Ler cLildren and
and otLer territories grand cLildren is eligible
tLat become part ol lor registration as
India tLerealter overseas citizen ol India
provided neitLer was at (CCI ) Minor cLildren ol
any time a citizen ol sucL person are also
AlgLanistan, BLutan, eligible lor CCI.
CLina, epal, Pakistan However, il tLe
and Sri Lanka, Cr wLo applicant Lad ever been a
is a spouse ol a citizen citizen ol Pakistan or
ol India or a person ol BangladesL, Le/sLe will
Indian origin as not be eligible lor CCI..
mentioned above.
3. How can - - Eligible persons to Eligible persons to apply
one get apply in tLe prescribed on line /down load
lorm alongwitL application lorm lrom
enclosures.Iorm MHA's website:
available on MHA's www.mLa.nic.in.
website: www.mLa.nic.in.
64
+. WLere to - - Jo tLe Indian Mission/ Jo tLe Indian Mission/
apply Post in tLe country Post ol tLe country ol
wLere tLe applicant is applicant's citizensLip or
ordinarily resident, il wLere Le/sLe is not in tLe
in India on long term country ol citizensLip, to
visa (more tLan one tLe Indian Mission/Post
year), to tLe IRRC, ol tLe country in wLicL
DelLi, Mumbai, Le/sLe is ordinarily
Kolkata, Amritsar, resident. Il tLe applicant
CHIC, CLennai or to is in India Le/sLe can
tLe joint secretary apply to tLe IRRC at
(loreigners),MHA. DelLi, Mumbai, Kolkata,
Amritsar, CHIC, CLennai
or to tLe Lnder Secretary,
CCI Cell, CitizensLip
Section Ioreigners
Division, Ministry ol
Home Allairs, ]aisalmer
House, 26 MansingL
Road, ew DelLi-
110011.
5. Iees - - Rs. 15000/- or LS $ 2/5 or equivalent in
equivalent in local local currency. In case ol
currency lor adults. PIC card Lolders, it is LS
Ior tLe cLildren upto $ 25 or equivalent in local
tLe age ol 18 years, currency.
tLe lee is Rs. /500/-
or equivalent in local
currency.
6. WLicL - - PIC ol all countries PICs ol all countries
nationals except AlgLanistan, except Pakistan and
are eligible BangladesL, BLutan, BangladesL.
CLina, epal,
Pakistan and Sri
Lanka
/. WLat All benelits o specilic (1)SLall not require (1)A multiple entry multi-
benelits one as available benelits. a separate visa to purpose lile long
is entitled to Indian visit India. visa lor visiting
to citizen (2) Will be exempt India.
subject to lrom tLe requirements (2)Exemption lrom
notilication ol registration il Lis/ registration witL local
issued by tLe Ler stay on any police autLority lor any
Covernment single visit in India lengtL ol stay in India.
lrom time to does not exceed (3)Parity witL non
time. 180 days. resident Indians (RIs) in
(3) In tLe respect ol economics
event ol continuous linancial and educational
stay in India lields except in relation to
exceeding 180 days, tLe acquisition ol
Le/sLe sLall Lave to agricultural or plantation
get Limsell/Lersell properties. o parity sLall
registered witLin be allowed in tLe spLere
30 days ol tLe ol political rigLts.
expiry ol 180 days Any otLer benelit to
witL tLe concerned CCIs will be notilied by
IRRC/IRC. tLe Ministry ol Cverseas
(+) Parity witL RIs in Indian Allairs (MCIA)
respect ol all lacilities under section /B (1) ol
available to tLe later tLe CitizensLip Act 1955.
in tLe economic,
linancial and
educational lields
excepts in maters
relating to tLe
acquisition ol
agricultural/
plantation properties.
o parity sLall be
allowed in tLe spLere
ol political rigLts.
8. Does o Yes and ol Can visit India Can visit India witLout
Le/sLe specilic type witLout visa lor visa lor lile long.
require depending on 15 year lrom tLe
visa lor Lis /Ler date ol issue
visiting purpose ol ol PIC card.
India visit.
9.Is Le o Yes Yes, one time wLen o
required tLe stay in India
to register exceeds 180 days
witL local lor tLe lirst time
police
autLorities
in India
10. WLat All Activity as All activities except All activities except
activities activities specilied in mountaineering, mountaineering,
can be tLe visa missionary and missionary and researcL
under researcL work and work and existing PAP/
taken in existing PAP/ RAP wLicL require
India RAP wLicL require specilic permit
specilic permit.
66
11.How can He/sLe is As per As per section 5 (1) Registered CCI may be
one acquire an Indian section 5 (1) (a) & 5(1) (c) ol tLe granted Indian
Indian citizen (a) & 5(1) CitizensLip Act, Le/ citizensLip alter 5 years
(c) ol tLe sLe Las to reside in lrom date ol registration
CitizensLip India lor minimum provided Le/sLe stays lor
Act, Le/ / years belore making one year in India belore
citizensLip application lor granting making application
sLe Las to Indian citizensLip
reside in
India lor
minimum
/ years belore
making
application
lor granting
Indian
citizensLip
5.3 CTHEB IMPCBTAT SCHEMES CI THE MIISTBY
1. E-rcmittancc gatcway
Cverseas Indians Lave limited cLoice ol eitLer using tLe last but expensive lacility or tLe economic but
relatively slow lacility to remit money back Lome. Keeping tLis in view, tLe ministry Las partnered witL tLe
LJI bank to develop an integrated, universal, electronic remittance gateway tLat combines tLe virtues ol
economy, speed and convenience. JLis portal will also extend advisory services on investment, taxation and
real estate to potential and interested overseas Indians, wLicL would enable overseas Indians to remit money
to India to designated accounts in any ol tLe1+,500 bank brancLes, operating on Real Jime Cross Settlement
(RJCS) network ol tLe RBI. JLe lacility is operational between DoLa and India at present. In tLe last two
montLs over 9000 remittances totaling about Rs 80+0 lakLs Lave been made. JLe advisory services are lully
operational and are available on tLe www.overseasindian.in portal. JLe remittance gateway is targeted to be
lully operational in tLe CCC countries, to begin witL by ]anuary 200/.
2. AAPI India Hcalth Initiativc
A MCL was signed witL tLe American Association ol PLysicians ol Indian Crigin during tLe Pravasi BLaratiya
Divas 2006. JLe main objective ol tLe scLeme is to promote, establisL and operate primary LealtL care
project tLrougL public private partnersLip witL AAPI. JLe locus ol tLe scLeme will be to implement
innovative and best practices to enLance access to LealtLcare, extend education and training to trainers and
otLer LealtL workers lor promotion ol preventive LealtL care practices in live diseases entities - Heart
disease, Dealness in cLildren, Diabetes, Carcinoma Cervix and Prostate cancer by leveraging tLe knowledge,
skills and resources ol AAPI and its members.
JLe project would develop best practice guidelines lor delivery ol LealtL care in tLe pilot villages wLicL will
be replicated by in tLe otLer areas. JLe scLeme would initiate capacity building ol tLe community to ensure
prescribed LealtL care standards in primary LealtL care.
JLe scLeme will be implemented in partnersLip witL tLe AAPI in tLe selected states ol BiLar and AndLra
PradesL. Jo begin witL pilot projects will be initiated in one village in all tLe districts ol botL tLe states. JLe
lunding will be done by tLe Central Covernment and Partner states wLile AAPI will be tLe knowledge
partner. Jo acLieve tLe objectives intensive training ol trainers lrom primary to tertiary level will be organized
by AAPI in collaboration witL local partners.
3. PBAVASI BHABATIYA BIMA YCjAA, 2006
A compulsory Insurance ScLeme lor tLe emigrants going abroad lor employment known as Pravasi BLaratiya
Bima Yojana (PBBY) 2003 came into lorce lrom 25.12.2003. JLe PBBY, 2003 Las now been upgraded as
tLe Pravasi BLartiya Bima Yojana, 2006 to provide broader coverage to tLe emigrant workers. JLe PBBY,
2006 Las come into ellect lrom 01.02.2006. JLe emigrant workers will now get a minimum insurance cover
ol Rs. 5 lakLs (instead ol Rs. 2 lakLs) and tLe policy will be lor tLe entire period ol employment contract. An
additional cover ol Rs. 25,000/- lor tLe legal expenses incurred by tLe emigrants in connection witL tLeir
employment Las also been included. JLe salient leatures ol tLe PBBY, 2006 are listed below:
JLe Pravasi BLartiya Bima Yojana, 2006 provides lor an insurance cover ol a minimum sum ol Rs. 5.00
lakLs payable to tLe nominee/legal Leir in tLe event ol deatL or permanent disability ol any Indian
68
emigrant wLo goes abroad lor employment purpose alter obtaining emigration clearance lrom tLe
concerned Protector ol Emigrants (PCE).
In tLe case ol deatL, besides tLe cost ol transporting tLe dead body, tLe Insurance Company sLall also
reimburse tLe cost incurred on one-way airlare ol one attendant.
Il a worker is not received by tLe employer on Lis arrival to tLe destination abroad or tLere is any
substantive cLange in Employment Contract to Lis disadvantage or il tLe employment is pre-maturely
terminated witLin tLe period ol employment lor no lault ol tLe emigrant, tLe Insurance Company sLall
reimburse one way economy class airlare provided tLe grounds ol repatriation are certilied by tLe
concerned Indian Mission/Post.
In cases wLere tLe Indian Mission/Post arranges tLe repatriation, tLe Insurance Company sLall re-
imburse tLe actual expenses to tLe concerned Indian Mission/Post.
JLe Insured person sLall be reimbursed actual one way economy class airlare by tLe Insurance Company
il Le lalls sick or is declared medically unlit to commence or continue working and tLe service contract
is terminated by tLe Ioreign Employer witLin twelve montLs ol taking tLe insurance.
JLe Insurance Policy sLall be valid lor a minimum period ol two years or tLe actual period ol contract,
wLicLever is longer.
JLe Insurance Policy sLall also provide medical cover ol a minimum ol Rs. 50,000/- as casL-less
Lospitalization and/or reimbursement ol actual medical expenses ol tLe insured emigrant workers on
grounds ol accidental injuries and/or sickness/ailments/diseases occurring during tLe period ol insurance
wLetLer in India or in tLe country ol Lis employment.
An insured person sLall be covered lor a minimum sum ol Rs. 25,000/- in connection witL tLe legal
expenses incurred by Lim in any litigation relating to Lis/Ler employment.
JLe Insurance Policy sLall also provide maternity benelits, subject to a minimum cover ol Rs. 20,000/
- in case ol women emigrants. In case ol medical treatment in tLe country ol employment, tLe maternity
benelits would be provided il tLe concerned Indian Mission/Post certilies tLe requisite documents.
JLe lamily ol emigrant worker in India consisting ol spouse and two dependent cLildren up to twenty
one years ol age sLall be entitled to Lospitalization cover in tLe event ol deatL or permanent disability
ol tLe insured person lor a maximum amount or Rs. 25,000/- per annum.
JLe Insurance Companies sLall cLarge lair and reasonable premium. Service tax will be cLarged as
applicable.
4. PBE- DEPABTLBE CBIETATIC AD SKILL LPCBADATIC CI
EMICBAT WCBKEBS
JLe scLeme ol Pre Departure Crientation & Awareness programme lor workers and skill upgradation ol
Indian Workers is started by tLe Ministry ol Cverseas Indian Allairs to impart orientation training and to
upgrade tLe skills ol Indian Workers intended to go abroad to give tLem competitive edge over tLe workers
lrom otLer countries.
In tLe cLanging competitive environment ol world economy Indian workers were going abroad are slowly
losing tLeir jobs to tLe more skilled workers coming lrom otLer countries. JLe orientation programme and
skill up gradation training will Lelp Indian workers retain tLeir jobs and also enable tLem to earn more wages
and return more money as remittance in tLe country. JLere would be inputs on Luman beLavior, recruitment,
visa and emigration procedures as well as elementary inputs in bookkeeping
JLe scLeme is implemented tLrougL tLe state Covernment labour departments and overseas manpower
corporations wLo will arrange tLe training ol tLe potential overseas Indian workers. MCIA will give lunds
upto Rs. 1 crore to eacL ol tLe participating state during tLe linancial year lor tLe training ol at most 10,000
workers.
5. SCHCLABSHIP PBCCBAMME ICB DIASPCBA CHILDBE (SPDC)
JLe specilic objective ol tLe ScLolarsLip ScLeme is to make LigLer education in India accessible to tLe
cLildren ol Cverseas Indians and publicise India as an education Lub. JLrougL tLis scLeme, it is Loped
tLat tLe students selected lor sucL scLolarsLips would become brand ambassadors lor India and its
educational institutions. Lnder tLe proposed ScLolarsLip ScLeme, Ministry ol Cverseas Indian Allairs
(MCIA) provides 100 scLolarsLips to Indian students eacL year starting lrom 2006-0/. JLe students are
selected on tLe basis ol an entrance test conducted by M/s Educational Consultants India Limited (Ed.CIL),
an autonomous body under MHRD witL wLom tLe Ministry is working on a partnersLip basis. CLildren
lrom developing countries wLere tLere are no extant educational lacilities or Lave less opportunities lor
LigLer studies and wLere tLere are large concentration ol tLe diaspora are targetted. JLe scLolarsLip
amount provided in 2006-0/ would cover approximately 60-/0% ol tLe tuition lees, depending on tLe
courses selected.
6. KCW IDIA PBCCBAMME (KIP)
JLe Know India Programme (KIP) is an on-going programme ol tLe Ministry ol Cverseas Indian Allairs,
wLicL aims at associating closely tLe younger generation ol tLe Indian Diaspora witL India. It provides a
unique lorum lor students and young prolessionals ol Indian origin to sLare tLeir views, expectations and
experience and bond closely witL contemporary India. JLis is a 3-week compreLensive orientation programme
organized by tLe Ministry ol Cverseas Indian Allairs. Participants are expected to make lull use ol tLis time
and tLe opportunities given by way ol connection extensively witL eacL segment in tLe programme. JLe
Ministry proposes to organize KIP 3-+ times a year including tLe one witL Pravasi BLaratiya Divas Leld every
year on 9 ]anuary.
Lnder KIP, lull local Lospitality is provided by tLe Covernment. Selected Interns are received and seen oll
at tLe airport. JLey Lave to pay only tLe international airlare. JLe Ministry ol Cverseas Indian Allairs
issues a circular to all Indian Missions/Posts abroad in tLis regard. Interested students and young prolessionals
lrom Indian diaspora sLould get in toucL witL tLe Indian Mission/Post nearer to tLem lor detailed inlormation
in tLis regard. JLe age ol tLe Intern sLould be between 18 and 25 years. JLe main objectives ol tLe program
are to create awareness about tLe pLenomenal translormation taking place in India and tLe country's progress
lrom just a destination lor culture, Leritage and art to an emerging powerLouse in tLe global economic
system, build linkages to bridge tLe inlormation gap and to prepare a blueprint lor creating a sustained
mecLanism lor engaging tLe Diaspora youtL witL India.
70
7. SCCIAL SECLBITY ACBEEMETS
JLe Ministry signed a Social Security Agreement (SSA) on ovember 3, 2006 witL Belgium lurtLer
strengtLening bilateral economic cooperation between tLe two countries. JLe importance ol tLis agreement
is tLat it is a bilateral instrument tLat best meets tLe needs ol a rapidly globalising economy sucL as India
wLere tLere is increasing circular movement ol tecLnically qualilied and trained persons witL otLer countries.
JLe Social Security Agreement negotiated by tLe Ministry Cl Cverseas Indian Allairs witL Belgium provides
lor tLe lollowing benelits to Indians and Belgians working in eacL otLer's countries:
1. JLose working on a sLort-term contract ol up to sixty montLs are exempted lrom social security
contributions in tLe Lost country provided tLey continue to make social security payments in tLeir
Lome countries.
2. JLose wLo live and work lor periods longer tLan sixty montLs and make social security contributions
under tLe Lost country laws will be entitled to tLe export ol tLe social security benelits sLould tLey
relocate to tLe Lome country on completion ol tLeir contract or on retirement.
3. JLese benelits will also be available to employees sent by a company to tLe Lost country lrom a tLird
country.
+. Sell-employed Indians in Belgium contributing to tLe Belgian social security system will be entitled to
tLe export ol social security benelits sLould tLey cLoose to relocate to India.
JLe Ministry ol Cverseas Indian Allairs is already negotiating similar agreements witL countries like JLe
etLerlands and Irance.
5.4 BACCACE BLLES AD VISA BLLES
BACCACE BLLES
Baggage Rules is an aspect ol customs network wLicL tLe common man going abroad or returning lrom
abroad Las to deal witL at customs.
Lnder tLe Ceneral Baggage Rules,
(1) used personal ellects, and
(2) new articles up to a value ol Rs. 12,000/- per adult passenger ( Rs. 25,000/- il tLe person returns
to India alter more tLan tLree days) are exempt.
A lower Iree Allowance ol Rs. 6,000/- is allowed to passengers coming ( alter 3 days) lrom epal, BLutan,
Burma or CLina provided tLey do not come across land borders witL tLese countries.
Passengers returning lrom Pakistan by road are allowed duty lree baggage up to Rs. 12,000/-.
Ior cLild passengers (below 10 years ol age), lree allowance is 50% ol tLe allowance admissible to an adult
passenger ol tLat category.
JLe Ceneral Iree Allowance ol passenger is not clubbable witL similar allowance ol anotLer passenger ( lor
example, Lusband or wile or any otLer relative traveling witL tLe passenger ) to permit clearance ol a costly
article ol baggage.
Laptop computer ( computer notebook ) brougLt by a passenger ol tLe age ol 18 years and above Las been
exempted w.e.l lrom 9-1-200+.
AlcoLolic liquor or wines up to two litres, 200 cigarettes and jewellery upto Rs. 20,000/- lor a lady and Rs.
10,000/- lor a gentleman can be brougLt as part ol tLe lree baggage allowance. Import ol cinematograpLy
lilms, exposed but not developed, brougLt as part ol baggage Las also been made duty lree.
In case a single article exceeding tLe limit ol Rs. 12,000 ( or Rs. 25,000 in value) is brougLt, 35% llat rate ol
duty witL no SAD or CVD is payable on excess value. +0% witLout SAD & CVD is also tLe ellective rate ol
duty lor any article ol bona lide baggage brougLt in excess ol lree allowance except lor lire arms, cartridges
ol lire arms exceeding 50 and excess cigarettes, cigars or tobacco.
But in terms ol exemption otilication o. +9/96-Cus., dated 23-/-1996, specilied goods covered under
listed Headings and otilications tLerein attract merit rate ( as applicable to cargo) even il imported as
baggage. Conditions, il any, prescribed in tLe listed otilication will apply to imports under baggage also.
Iree allowance is restricted in case ol visit to contiguous countries like Maldives, Sri Lanka, epal and
BLutan.
'Baggage' does not include motor veLicle, lire arms and goods ol commercial nature or in commercial quantities.
JLere are value/ quantity restrictions on bringing jewellery, cigarettes and liquor. However, primary gold up
to ten kgs. per passenger and silver up to one Lundred kgs. per passenger can be imported on payment ol
normal duties in convertible loreign excLange provided tLe concerned passenger is coming to India alter at
72
least six montLs' stay abroad. Ior crew members ol a vessel or aircralt, lree allowance lor petty gilts is
Rs 600/-.
Transfcr of Bcsidcncc
In tLe case ol passengers translerring tLeir residence to India alter stay abroad ol two years or more,
personal and LouseLold ellects in use abroad and six new specilied LouseLold gadgets are exempt lrom
duty but 15 % llat duty witLout SAD Las to be paid on 1/ listed articles ol consumer durables witLin
value ceiling ol 5 lakLs. In tLe case ol transler ol residence alter stay abroad ol at least one year, otLer
personal and LouseLold ellects in use abroad and not exceeding Rs. /5,000/- in aggregate value can be
brougLt in lree. In addition, tLere are lree allowances ol varying value lor prolessional artisans coming
to India alter 3 montLs/6 montLs ( duty lree LouseLold article wortL Rs. 12,000/- and prolessional
equipment wortL Rs. 20,000/- /+0,000/).
Allowance lor gilts as well as lor travel souvenirs in tLe case ol loreign tourists is Rs. 8,000/-( Rs.6,000/
- in tLe case ol tourists lrom Pakistan origin), apart lrom personal ellects in use ol tLe tourist. Peak rate
ol duty lor baggage goods ol Heading 98.03 is 150% non-bona lide baggage is in addition to line and
penalty.
Ioreign Jravel Jax and Inland Air Jravel Jax Lave been exempted lor all passengers witL ellect lrom 9-
1-200+.
Passengers not carrying any dutiable goods can walk tLrougL tLe Creen CLannel. CtLers are required
to come to tLe Red CLannel and report at customs counter. JLere are now no restrictions on resale ol
baggage goods.
Passengers importing / exporting commercial samples as accompanied baggage sLould lollow tLe
procedure laid down in tLis beLall. Il an importer is desirous ol paying duty on an article at tLe cargo
rate but by mistake Le Las brougLt tLe said article as baggage, Le can rectily tLe error by lilling an
application belore tLe autLorities along witL submission ol a bill ol entry (Collector v. A.K.DLawan).
Please visit tLe website www.cbcc.gov.in lor tLe complete Baggage Rules 1998.
Typc of Visa Cthcr rcquircmcnts/conditions
Jourist Visa il
Jransit Visa Copy ol airline tickets
Entry Visa Issued to People ol Indian Crigin only
Business Visa Letter lrom tLe sponsoring organization indicating nature ol applicant's
business, probable duration ol stay, validity ol visa, places and organizations
to be visited and also a guarantee to meet maintenance expenses etc.
Employment Visa Contract witL tLe employer
Student Visa A letter conlirming admission to tLe institution along witL evidence ol
linancial arrangements lor stay in India.In case ol admission in medical or
paramedical courses in India, CC lrom Ministry ol HealtL, Covt. ol
India.In case ol admission in graduate or post graduate courses in engineering/
tecLnical institutions in India, CC lrom Ministry ol Human Resources
Development (Department ol Education)
ResearcL Visa Approval ol Ministry ol Human Resource Development
]ournalist Visa Civen to prolessional journalists and pLotograpLers lor upto tLree montLs
say in India
Conlerence Visa Letter ol invitation lrom tLe organizer ol tLe conlerence
LITED KICDCM
Visa application lorms (available at Lttp://www.Lcilondon.net) sLould be accompanied lor all types ol
visas by two pLotograpLs and applicant's original passport sLould Lave validity ol six montLs.
Jourist Visa il
Business Visa Letter explaining tLe nature ol business and duration lrom LK company
and letter ol invitation lrom an Indian Company
Conlerence Visa Letter ol invitation lrom tLe conlerence organizer
Jransit Visa Evidence ol onward travel outside India is required
Entry Visa Issued to People ol Indian Crigin only
Long Jerm Visa JLis settlement visa is issued to people ol Indian origin
Student Visa Letter ol admission lrom recognized educational institution witL duration
ol tLe course
]ournalist Visa Letter lrom employer wLere applicable
Employment Visa An employment contract signed by botL tLe parties sLould be submitted
VISA BLLES
CEEBAL VISA BEQLIBEMETS ICB ETBY / STAY I IDIA
LITED STATES CI AMEBICA
Visa application lorms (available at www.indiacgny.org) sLould be accompanied lor all types ol visas
by two pLotograpLs and applicant's original passport sLould Lave validity ol six montLs.
74
MALBITILS
Visa application lorms (available at Lttp://indiaLigLcom.intnet.mu) sLould be accompanied lor all
types ol visas by tLree passport size pLotograpLs, pLotocopy ol conlirmed return air ticket and
applicant's original passport sLould Lave validity ol six montLs.
ote: tLe above VISA rules are not applicable to tLe Lolders ol diplomatic and ollicial passport.
MALAYSIA
Visa application lorms (available at Lttp://www.indianLigLcommission.com.my) sLould be
accompanied lor all types ol visas by tLree pLotograpLs and applicant's original passport sLould Lave
validity ol six montLs.
Typc of Visa Proof/ Cthcr rcquircmcnts/conditions
Jourist Visa Hotel booking in cities intended to travel in IndiaJravellers cLeques or
receipt ol excLange ol money in tLe name ol applicant $50 per day per
person lor stay in India or notarized letter ol sponsorsLip lrom person residing
in India, guaranteeing all expenses ol stay, travel etc ol tLe applicant in
India or Credit Cards accompanied by covering letter ol Bank
Business Visa Business in MauritiusLetter lrom company in Mauritius sLowing exact nature
ol business to be transacted and details ol person deputed lor tLe purpose
andLetter lrom company in India, indicating tLe details ol person, visiting
India and tLe nature ol Business
Education Visa lor lresLers Eligibility certilicate lrom concerned universityil
Student Visa Extension Eligibility certilicate lrom concerned universityPLotocopy ol college Identity
Card, Bonalide certilicate, Residence permit pLotocopy
SCLTH AIBICA
Visa application lorms (available at Lttp://www.indconjoburg.co.za) sLould be accompanied lor all
types ol visas by two pLotograpLs, original passport (SoutL Alrica or any otLer country), one air
ticket copy (except two lor business visa) and birtL certilicate/SoutL Alrican ID.
Jourist Visa il
Business Visa Jwo copies ol invitation letter lrom India and two copies ol letter lrom
SoutL Alrican company
Study Visa Letter lrom ScLool, Institution or college (Duration ol study must be
mentioned)
Employment Visa Employment Letter lrom company and letter ol CC lrom Ministry ol
Labour, India
Sports Visa Invitation Letter lrom India
Jourist Visa Letter ol recommendation lrom sponsor
Business Visa Letter ol request lrom business establisLment in Saudi Arabia
Jransit Visa Letter ol recommendation lrom sponsor
Student Visa Provisional admission letter lrom recognized educational institution in India.
Letter ol linancial support/guardian along witL a bank guarantee wortL
Saudi riyals Seven JLousand. Letter ol recommendation lrom sponsor
Visa to visit relatives or ames and complete addresses ol relatives to be visited in India. Medical
lor Medical Jreatment Reports/Hospital Relerences in case ol medical treatment. Letter ol
recommendation lrom sponsor.
Employment Visa Copy ol contract signed witL tLe employer in India or letter regarding oller
ol ppointment in India. Letter ol recommendation lrom sponsor.
Diplomatic/Cllicial Visa ote verbale lrom tLe applicant's embassy indicating tLe purpose ol tLe visit
CAADA
Visa application lorms (available at Lttp://www.Lciottawa.ca) sLould be accompanied lor all types ol
visas by one pLotograpL lor tLe business visa and two pLotograpLs lor tLe rest and a valid passport.
Typc of Visa Cthcrs rcquircmcnts/conditions
Business Visa Letter lrom tLe applicant's company stating tLe purpose ol visit and anotLer
letter lrom Indian company inviting tLe applicant Additional Business
Inlormation SLeet to be lilled in
Student Visa Letter ol admission lrom Covernment ol India recognized scLool/institution
Long Jerm Visa Sullicient reason witL documentary prool lor granting long term visa
LITED ABAB EMIBATES
Visa application lorms (available at www.indianembassy.org.sa) sLould be accompanied lor all types
ol visas by two pLotograpLs, Saudi exit/re-entry visa on tLe passport and applicant's original passport
sLould Lave validity ol two montLs beyond tLe validity ol visa,
Jransit Visa Conlirmed Air Jicket
Jourist Visa il
Business Visa Prool ol business in India
Student Visa Prool ol admission in recognized institution in India
Employee Visa Prool ol employment in India
CtLer Visa Consult tLe counter
76
5.5 IBEQLETLY ASKED QLESTICS
1.What arc thc forms in which busincsscs can bc conductcd by a forcign company in India:
Ans. Ioreign companies can make investments or operate tLeir business in a number ol ways sucL as Liaison/
Representative Cllice, Project Cllice, BrancL Cllice, 100% WLolly owned subsidiary and ]oint venture
company. JLe requisite approval can be granted by Reserve Bank ol India (RBI) or Ioreign Investment
promotion Board (IIPB). Any company set up witL IDI Las to be incorporated under tLe Indian Companies
Act witL tLe Registrar ol Companies, Department ol Company Allairs and all Indian operations would be
conducted tLrougL tLis company.
2. What proposals rcquirc an Industrial Liccncc (IL) and how is it obtaincd:
Ans. In tLe ew Industrial Policy, all industrial undertakings are exempt lrom licensing except lor tLose
industries given in Annexure I and II and tLose reserved lor tLe Small Scale Sector. JLe project sLould not be
located witLin 25 kilometres ol a city witL a population ol more tLan one million as per 1991 Population
Census.
JLe Covernment Las substantially liberalised tLe procedures lor obtaining an Industrial Licence. JLe application
in lorm IL-IC sLould be liled witL tLe SIA. Approvals normally granted witLin 6-8 weeks.
3. What is thc proccdurc for a dcliccnscd scctor:
Ans.An Industrial undertaking exempted lrom licensing needs only to lile inlormation in tLe Industrial
Entrepreneurs Memorandum (IEM) witL tLe SIA, wLicL will issue an acknowledgement. o lurtLer approvals
are required.
4. What is thc Taxation Policy in India:
Ans. Ioreign nationals working in India are generally taxed only on tLeir Indian income.Income received
lrom sources outside India is not taxable unless it is received in India.JLe Indian tax laws provide lor exemption
ol tax on certain kinds ol income earned lor services rendered in India. IurtLer, loreign nationals Lave tLe
option ol being taxed under tLe tax treaties tLat India may Lave signed witL tLeir country ol residence.
5. What arc thc important Labour Bulcs/ Bcgulations applicablc in India:
Ans. Lnder tLe Constitution ol India, Labour is a subject in tLe Concurrent List wLere botL tLe Central &
State Covernments are competent to enact legislation subject to certain matters being reserved lor tLe
Centre. Some ol tLe important Labour Acts, wLicL are applicable lor carrying out business in India, are
Employees- Provident Iund and Miscellaneous Provisions Act, 1952
Employees- State Insurance Act 19+8
Workmen`s Compensation Act, 1923
Maternity Benelit Act, 1961
Payment ol Cratuity Act, 19/2
Iactories Act, 19+8
Dock Workers (Salety, HealtL & Wellare) Act, 1986
Mines Act, 19/2
Minimum Wages Act
Payment ol Bonus Act 1965
Contract Labour Regulation & Abolition] Act 19/0
Payment ol Wages Act, 1936
6. What is thc situation rcgarding Intcllcctual Propcrty Bights protcction in India:
Ans. India is a signatory to tLe agreement concluding tLe Lruguay Round ol CAJJ negotiations and
establisLing tLe World Jrade Crganisation (WJC). JLis Agreement, inter-alia, contains an Agreement on
Jrade Related Aspects ol Intellectual Property RigLts (JRIPS), wLicL came into lorce lrom 1
st
]anuary 1995.
It lays down minimum standards lor protection and enlorcement ol Intellectual Property RigLts in member
countries, wLicL are required to promote ellective and adequate protection ol Intellectual Property RigLts
witL a view to reducing distortions and impediments to international trade. JLe obligations under tLe JRIPS
Agreement relate to provision ol minimum standards ol protection witLin tLe member country`s legal systems
and practices.
As regards tLe status ol various Intellectual Property laws in India and standards in respect ol various areas
ol intellectual property, alaw on Jrade Marks Las been passed by Parliament and notilied in tLe gazette on
30.12.1999. JLis law repeals and replaces tLe earlier Jrade & MercLandise Act, 1958. A new law lor tLe
protection ol CeograpLical Indications, viz., tLe CeograpLical Indications ol Coods (Registration and tLe
Protection) Act, 1999 Las also been passed by tLe Parliament and notilied on 30.12.1999. JLe Rules required
under tLe Act were notilied vide otilication o. C.S.R. 1/6 (E) dated 8
tL
MarcL, 2002. JLe Act and tLe
Rules Lave been brougLt into lorce simultaneously witL tLe setting up ol Intellectual Property Appellate
Board (IPAB) under tLe Jrade Marks Act, 1999 on September 15, 2003. Alaw called tLe Designs Act, 2000
relating to Industrial Designs wLicL repeals and replaces tLe earlierDesigns Act, 1911 Las also been passed
by Parliament in its Budget Session, 2000. JLe Act Las been brougLt into lorce lrom 11.05.2001.A Bill on
Patents to amend tLe Patents Act, 19/0 was passed by Parliament on 1+.05.2002. JLe amendment to tLe
patent law Las been made operational in May 2003.
7. Is Invcstmcnt by on-Bcsidcnt Indians (BIs) pcrmittcd:
Ans. JLe Covernment attacLes importance to investments by RIs. Covernment Las provided a liberalised
policy lramework lor approval ol RI investments tLrougL botL tLe Automatic and tLe Covernment route.
RIs are permitted to invest up to 100% equity in tLe Real Estate and Civil Aviation Sectors. Automatic
Approval is given by tLe RBI to all RI proposals witL tLeir investment up to 100% lor all items/activities
except a lew exceptions mentioned in Press ote 2 (2000 series) read witL sector specilic guidelines.
Covernment approval is given lor all proposals not qualilying lor Automatic Approval.
78
8. Can profits, dividcnds, royalty, know how paymcnts bc rcpatriatcd from India:
Ans. All prolits, dividends, royalty, know Low payments tLat Lave been approved by tLe Covernment/RBI
can be repatriated. Some sectors like investment in development ol integrated townsLip, RI Investment in
real estates, etc. may attract a lock-in period.
9. What arc thc formalitics a |oint vcnturc company has to complctc to incrcasc thc forcign cquity
holding:
Ans: JLe lollowing lormalities are required lor tLe joint ventures tLat want to increase in tLeir loreign
equity Lolding by acquisition ol sLares or by any otLer means.
a) Il only tLe quantum ol loreign equity increased witLout cLange in percentage tLen Press ote no.
/ (1999 series) may be lollowed.
b) Ior increase in percentage ol loreign equity by way ol expansion ol capital base, automatic route
or IIPB / Covernment route would apply depending upon tLe nature ol proposal in terms ol Press
ote o. 2 (2000 series)
c) Cases involving increase in percentage in loreign equity by way ol acquiring existing sLares in an
Indian company would necessarily require prior approval ol IIPB/Covernment.
d) In cases involving inclusion ol an additional loreign collaborator, guidelines laid down in Press
ote o. 18 (1998 series) would Lave to be satislied.
10. What is thc policy of convcrsion of non-rcpatriablc sharcs into rcpatriablc sharcs:
Ans. IIPB approval is required. WLere original investment was made in loreign excLange, tLe cLange is
allowed witLout any conditions, il not, tLe sale proceed will Lave to be repatriated to India by opening an
RC account.
11. What is thc mcchanism for publicizing thc changcs in thc IDI Policics:
Ans. CLanges in IDI policies are brougLt out in tLe lorm ol Press otes by Department ol Industrial Policy
& Promotion (DIPP). Soon alter releasing tLe Press otes to tLe media, it is also loaded on tLe Departmental
website (Lttp://dipp.nic.in).
JLe detailed guidelines regarding tLe Indian investment abroad may be seen at tLe website (www.iic.nic.in)
ol India Investment Centre, Department ol Economic Allairs, Ministry ol Iinance.
12. What is Intcrnational Ccntrc for Altcrnativc Disputc Bcsolution (ICADB):
Ans. International Centre lor Alternative Dispute Resolution (ICADR) Las been establisLed as an autonomous
organization under tLe aegis ol Ministry ol Law, ]ustice and Company Allairs to promote settlement ol
domestic and international disputes by dillerent modes ol alternate dispute resolution. ICADR Las its
Leadquarters in ew DelLi and Las regional ollice in Lucknow and Hyderabad. More inlormation on ICADR
can be obtained lrom tLe website:
13. What arc thc rcgulation for companics cxporting and importing products from /into India:
(A) Exports:
Reserve Bank Las made tLe Ioreign ExcLange Management (Export ol Coods and Services) Regulations,
2000 relating to export ol goods and services lrom India, notilied vide otilication o. IEMA 23/2000-
RB, dated 3
rd
May, 2000, as amended lrom time to time.
JLe basic requirements under tLe excLange control regulations are tLat tLe exports are to be declared in :
CR (lor all export transactions otLer tLan tLrougL tLe postal cLannel),
PP (lor transactions tLrougL tLe postal cLannel) and
Soltex lorms (lor soltware exports).
(i) Exemptions lrom Declarations
JLe requirement ol declaration ol export ol goods and soltware in prescribed lorm will not apply in certain
cases sucL as
Coods sent lor testing abroad, subject to re-import.
Cilt ol goods exceeding rupees one lakL in value require approval ol tLe Reserve Bank.
Ior export promotion subject to a specilic ceiling (Rs. 5 lakLs).
Import trade is regulated by tLe Directorate Ceneral ol Ioreign Jrade (DCIJ) under Ministry ol Commerce
& Industry, Department ol Commerce, Covernment ol India.AutLorised dealers, wLile undertaking import
transactions, sLould ensure tLat tLe imports into India are in conlormity witL tLe Export Import Policy in
lorce and relevant provisions ol IEMA.
(i) Import Liccnscs
AutLorised dealers are allowed to open letters ol credit and allow remittances lor import ol goods unless
tLey are included in tLe negative list requiring licence under tLe EXIM Policy in lorce.
Detailed IAQs on Export / Import are available on tLe DIPP web site (Lttp://dipp.nic.in)
14. What is thc proccdurc to bc followcd upon changc of Bcsidcntial Status:
Ans.Lpon cLange ol residential status, intimation sLould be given to tLe bankers about tLe cLange ol
Residential Status, so tLat tLe existing RE, RC or ICR account is designated as a Resident Account,
witL tenure and interest rates remaining uncLanged and WLen a person resident in India becomes a on-
Resident, so tLat tLe existing account is designated as a on-Resident Crdinary Account (RC).
15. If any pcrmission from BBI is rcquircd to acquirc or transfcr agricultural land / plantation
propcrty/ farm housc by a pcrson rcsidcnt outsidc India or a forcign national, to whom should thc
application bc madc: Is thcrc any prcscribcd form for thc application:
Ans. All requests lor acquisition or transler ol agricultural land /plantation property/larm Louse by any
person resident outside India or a loreign national may be made to tLe CLiel Ceneral Manager, Reserve Bank
80
ol India, Central Cllice, ExcLange Control Department, Ioreign Investment Division (III), Mumbai-+00
001 (India). o application lorm Las been prescribed.
16. Is thcrc any rcstriction on numbcr of rcsidcntial propcrtics that may bc purchascd by an BI:
Is thcrc any rcstriction on pcriod of holding for such propcrtics:
Ans. JLere are no restrictions on number ol residential properties tLat may be bougLt by an RI. However,
repatriation is allowed only in respect ol two sucL properties and tLat, too, alter tLree years lrom date ol
acquisition ol sucL property or lrom date ol payment ol linal instalment, wLicLever is later.
17. Can BI rcpatriatc thc full considcration upon thc salc of his propcrty:
Ans. India is a lully convertible on current account and partial on capital account. Remittance ol sale
proceed is limited to tLe cost ol property only and tLe amount ol gain on sale ol property, can not be
repatriated.
18. Is thcrc any gcncral prohibition from acccpting any forcign contribution:
Ans. Yes, tLe lollowing categories ol persons are proLibited lrom accepting any loreign contribution eitLer,
directly or indirectly or tLrougL any otLer person (wLicL includes on Resident Indian citizen lor tLe benelits
ol sucL categories ol person:
(a) candidate lor election
(b) correspondent, columnist, cartoonist, editor, owner, printer or publisLer ol a registered newspaper,
(c) ]udge, Covernment Servant or employee ol any government corporation / undertaking,
(d) Member ol any Legislature,
(e) Political party or ollice bearer tLereol.
However, certain exemption lrom general proLibition Las been granted in Sec 8 ol ICRA.
19. Should an association /trust/socicty gct rcgistcrcd undcr thc I.C.B.Act:
Ans. An association /trust/ society Laving delinite culture, economic, educational, religious, or social
programme cannot accept loreign contribution unless it registers itsell witL tLe Central Covernment by
applying in Iorm o IC- 8 or gets prior permission by applying in Iorm IC-1A.
JLe Iorm Las to be submitted to Ministry ol Home Allairs, Lok Ayut BLavan , KLan Market, ew DelLi.
JLe registration process takes at least 5/6 montLs to complete wLile permission process takes 90 days.
5.6 LIST CI IMPCBTAT WEBSITES
Wcbsitc addrcsscs of Important Ministcrs/Dcpartmcnts
Ministry of Cvcrscas Indian Affairs http://moia.gov.in
Department ol BiotecLnology Lttp://dbtindia.nic.in
Bureau ol Indian Standards Lttp:// www.bis.org.in
Department ol CLemicals & PetrocLemicals Lttp://cLemicals.nic.in
Ministry ol Civil Aviation Lttp://civilaviation.nic.in
Department ol Commerce Lttp://commerce.nic.in
Ministry ol Coal Lttp://coal.nic.in
Ministry ol Company Allairs Lttp://dca.nic.in
Department ol Education Lttp://education.nic.in
Ministry ol Environment and Iorests Lttp://envlor.nic.in
Department ol Explosives Lttp://explosives.nic.in
Ministry ol External Allairs Lttp://www.meanindia.nic.in
Ministry ol Iinance Lttp://linmin.nic.in
Directorate Ceneral ol Ioreign Jrade Lttp://dglt.delLi.nic.in
Department ol Heavy Industries Lttp://dLi.nic.in
Department ol Industrial Policy & Promotion Lttp://dipp.nic.in
Ministry ol Inlormation and Broadcasting Lttp://mib.nic.in
Department ol Inlormation JecLnology Lttp://www.mit.gov.in
Ministry ol Labour Lttp://labour.nic.in
Ministry ol Mines Lttp://mines.nic.in
Ministry ol on-Conventional Energy Sources Lttp://mnes.nic.in
Cllice ol JLe Controller Ceneral Cl Patents Lttp://patentollice.nic.in
Ministry ol Petroleum And atural Cas Lttp://petroleum.nic.in
Ministry ol Power Lttp://powermin.nic.in
Ministry ol Railways Lttp://www.indianrailways.gov.in
Reserve Bank ol India Lttp://www.rbi.org.in
Department ol Road Jransport & HigLways Lttp://mortL.nic.in
Department ol SLipping Lttp://sLipping.nic.in
Ministry ol Small Scale Industries Lttp://ssi.nic.in
Ministry ol Statistics and Programme Implementation Lttp://mospi.nic.in
Department ol Jelecommunication Lttp://www.dotindia.com
Ministry ol Jextile Lttp://texmin.nic.in
Ministry ol Jourism Lttp://tourismolindia.com
Ministry ol Lrban Development Lttp://urbanindia.nic.in
Ministry ol Water Resource Lttp://wrmin.nic.in
82
Wcbsitc Addrcsscs of Statcs/Lnion Tcrritorics
Andaman & icobar (LJ) Lttp://andaman.nic.in
AndLra PradesL Lttp://www.aponline.gov.in
Assam Lttp://assamgovt.nic.in
BiLar Lttp://biLar.nic.in
CLandigarL(LJ) Lttp://cLandigarL.nic.in
CLLattisgarL Lttp://cLattisgarL.nic.in
Dadra & agar Haveli Lttp://odic.nic.in
Daman & Diu Lttp://daman.nic.in
DelLi Lttp://delLigovt.nic.in
Coa Lttp://goagovt.nic.in
Cujarat Lttp://www.gujratindia.com
Haryana Lttp://Laryana.nic.in
HimacLal PradesL Lttp://LimacLal.nic.in
]ammu & KasLmir Lttp://jammukasLmir.nic.in
]LarkLand Lttp://jLarkLand.nic.in
Karnataka Lttp://www.karnataka.nic.in
Kerala Lttp://www.kerala.gov.in
LaksLdweep(LJ) Lttp://laksLadweep.nic.in
MadLya PrdesL Lttp://www.mp.nic.in
MaLarasLtra Lttp://maLarasLtra.gov.in
Manipur Lttp://manipur.nic.in
MegLalaya Lttp:// megLalaya.nic.in
Mizoram Lttp://mizoram.nic.in
agaland Lttp://nagaland.nic.in
Crissa Lttp://orissagov.nic.in
PondicLerry(LJ) Lttp://pondicLerry.nic.in
Punjab Lttp://punjabgovt.nic.in
RajastLan Lttp://www.rajastLan.gov.in
Jripura Lttp://tripura.nic.in
Lttar PradesL Lttp://upgov.nic.in
LttrancLal Lttp://gov.ua.nic.in
West Bengal Lttp://www.wbgov.com
Sikkim Lttp://sikkimgov.nic.in
Jamil adu Lttp://www.tn.gov.in
MIISTBY CI CVEBSEAS IDIA AIIAIBS
9
tL
Iloor, Akbar BLawan, CLanakya Puri
ew DelLi-110021
Jel: 91 11 2+19 /900 Iax: 91 11 2+6/ +1+0
Contact dctails of thc Scnior Cfficcrs of thc Ministry
1. Mr. irmal SingL
Secretary
Jele: 2+6/+1+3/2+6/+1++
e-mail :secretary_moia.nic.in
2. Mr. Malay MisLra
]oint Secretary (Diaspora Services)
Jele: 268/+2+0
e-mail : jsds_moia.nic.in
3. Mr. C. CurucLaran
]oint Secretary (Iinancial Services)
Jele: 2+6/6210
e-mail : jsls_moia.nic.in
+. Mr. ]agadananda Panda
Protector Ceneral ol Emigrants
Jele: 268/+250
e-mail: pge_moia.nic.in
Ior furthcr dctails about thc book plcasc contact
1. Ms. SandLya SLukla
Director
Jele: 268/+231, 2+19/918
e-mail : dirss_moia.nic.in
2. Ms. Anupma Aggarwal
Partner
PeeyusL Aggarwal & Co.
CLartered Accountants
B-132 Anand ViLar, DelLi-110092
Jele: 011 2216+800, 2216+/00
Iax: 91-11-2216+800
Mobile: 9193122/6/31
e-mail: anupma_indialiaison.com
Website: www.indialiaison.com
CONTACT DETAILS
CONTACT DETAILS
ANNEXURES
Annexure-I
DETAILS CI SELECTED ACECIES/ DEPABTMETS
IVCLVED WITH VABICLS CLEABACES/APPBCVALS
AD THEIB WEB-SITES
Sub|cct Mattcr Conccrncd Ministry/Dcpartmcnt Wcbsitc addrcss
of Covt. of India
Industrial Entrepreneur Department ol Industrial Lttp://dipp.gov.in
Memorandum lor Policy & Promotion
delicensed industries
Approval lor Industrial Department ol Lttp://dipp.gov.in
License / carry-on-business Industrial Policy
License & Promotion
Approval lor JecLnology
Jransler:
(i) Automatic route Reserve Bank ol India Lttp://www.rbi.org.in
(ii) Covernment Department ol Industrial Lttp://dipp.gov.in
approval (PAB) Policy & Promotion
Approval lor linancial
collaboration:
(i) Automatic route Reserve Bank ol India Lttp://www.rbi.org.in
(ii) Covernment approval Department ol Economic Allairs Lttp://linmin.nic.in
(IIPB)
Approval ol Industrial Park Department ol Industrial Lttp://dipp.gov.in
(i) Automatic route Policy & Promotion
(ii) on-Automatic route
(Empowered Committee)
Registration as a company Ministry ol Company Allairs Lttp://mca.gov.in
& certilicate ol (Registrar ol Companies)
commencement ol business
Matters relating to IDI Department ol Industrial Lttp://www.dipp.gov.in
policy and its promotion Policy & Promotion
and lacilitation as also
promotion and lacilitation
ol investment by
on-Resident Indians (RIs)
ANNEXURES
88
Matters relating to Reserve Bank ol India Lttp://www.rbi.org.in
Ioreign ExcLange
Matters relating to Jaxation Department ol Revenue Lttp://linmin.nic.in
Matters relating to Direct Central Board ol Direct Jaxes Lttp://incometaxindia.gov.in
Jaxation
Matters relating to Excise Central Board ol Excise Lttp://www.cbec.gov.in
& Customs & Custom
Matters relating to Ministry ol Labour Lttp://labour.nic.in
Industrial Relations
Import ol Coods Directorate Ceneral ol Ioreign Jrade Lttp://dglt.delLi.nic.in
Matters relating to Ministry ol Environment and Iorests Lttp://envlor.nic.in
Environment & Iorest
clearance
Cverseas investment by Ministry ol Cverseas Indian Allairs www.moia.gov.in
Indians
Allotment ol land/sLed in Departments Concerned ol State Web site address ol
industrial areas, acquisition Covernments tLe State/LJ is
ol land, cLange in land use, given at 5.6 in tLis book
approval ol building plan,
release ol water connection
etc.
Annexure-II
SECTCB SPECIIIC CLIDELIES ICB
ICBEIC DIBECT IVESTMET
S. Scctor/Activity IDI Cap / Entry Bclcvant
o. Equity Boutc Cthcr conditions Prcss
otc issucd
by D/o IPP
1. Airports-
a. Creenlield 100% Automatic Subject to sectoral P + / 2006
projects regulations notilied by
Ministry ol Civil Aviation
www.civilaviation.nic. in
b. Existing projects 100% IIPB Subject to sectoral P + / 2006
Beyond regulations notilied
/+%. By Ministry ol Civil Aviation
2. Air Jransport +9%- IDI, Automatic Subject to no direct or P +/2006
Services 100%- lor Indirect participation by
RI loreign airlines.
Investment Covernment Cl India
Cazette otilication
dated 2.11.200+ issued
by Ministry Cl Civil Aviation
3. AlcoLol 100% Automatic Subject to license by P + / 2006
Distillation & appropriate autLority
Brewing
+. Asset +9% IIPB WLere any individual
Reconstruction (only IDI) investment exceeds
Companies 10% ol tLe equity,
provisions ol Section
3(3)(l) ol Securitization
and Reconstruction ol
Iinancial Assets and
Enlorcement ol Security
Interest Act, 2002
sLould be complied witL.
www.linmin.nic.in
ANNEXURES
90
5. Atomic Minerals /+% IIPB Subject to guidelines issued
by Department ol Atomic
Energy vide Resolution
o. 8/1 (1 )/9/-PSL/
1+22 dated 6.10.98.
6. Banking - Private /+% Subject to guidelines lor P 2 / 200+
sector (IDIIII) setting up brancLes /
subsidiaries ol loreign
banks issued by RBI.
www.rbi.org.in
7. Broadcasting
a. IM Radio IDIIII IIPB Subject to guidelines P 6 / 2005
investments notilied by Ministry ol
up to 20% Inlormation &Broadcasting
www.mib.nic.in
b. Cable network +9% IIPB Subject to Cable Jelevision
(IDIIII) etwork Rules (199+)
otilied by Ministry ol
Inlormation & Broadcasting
www.mib.nic.in
c. Direct Jo Home +9% IIPB Subject to guidelines
(IDIIII) issued by Ministry ol
witLin tLis limit Inlormation & Broadcasting
IDI Component www.mib.nic.in
not to exceed
20%
d. Setting up +9% IIPB Subject to Lp-linking P 1 / 2006
Lardware lacilities (IDIIII) Policy notilied by Ministry
sucL as up-linking, ol Inlormation &
HLB, etc Broadcasting www.mib.nic.in
e. Lp-linking a 26% IIPB Subject to guidelines issued P 1 / 2006
ews & Current IDIIII by Ministry ol Inlormation
Allairs JV & Broadcasting
CLannel www.mib.nic.in
l. Lp-linking a 100% IIPB Subject to guidelines issued P 1 / 2006
on-ews & by Ministry ol Inlormation
Current Allairs & Broadcasting
JV CLannel www.mib.nic.in
8. Cigars & 100% IIPB Subject to industrial license P + / 2006
Cigarettes under tLe Industries
Manulacture (Development &
Regulation) Act, 1951
9. Coal & Lignite 100% Automatic Subject to provisions ol P + / 2006
mining lor captive Coal Mines (ationalization)
consumption by Act, 19/3
power projects, www.coal.nic.in
and iron & steel,
cement
production and
otLer eligible
activities
permitted under
tLe Coal
Mines
(ationalization)
Act, 19/3.
10. Collee & 100% Automatic P + / 2006
Rubber processing
& wareLousing
11. Construction 100% Automatic Subject to conditions P 2 / 2005
Development notilied vide Press ote 2 &
projects, including (2005 Series) including: P 2 / 2006
Lousing, a. minimum capitalization
commercial ol LS$ 10 million lor wLolly
premises, resorts, owned subsidiaries and LS$
educational 5 million lor joint venture.
institutions, JLe Iund would Lave
recreational to be brougLt witLin six
lacilities, montLs ol commencement
city and regional ol business ol tLe Company.
level inlrastructure, b. Minimum area to be
townsLips. developed under eacL
project 10 Lectares in case
ol development
ol serviced Lousing plots,
and built up area ol 50,000
sq. mts in case ol
construction development
project, and any ol tLe
above in case ol a
combination project.
[otc:Ior invcstmcnt by
BIs, thc conditions
mcntioncd in Prcss otc
2/2005 arc not applicablc.]
ANNEXURES
92
12. Courier services lor 100% IIPB Subject to existing laws and P + / 2001
carrying packages, exclusion ol activity relating
parcels and otLer to distribution ol letters,
items wLicL do not wLicL is exclusively reserved
come witLin tLe lor tLe State.
ambit ol tLe Indian www.indiapost.gov.in
Post Cllice Act,
1898.
13. Delence 26% IIPB Subject to licensing under P + / 2001
production Industries (Development & &
Regulation) Act, 1951 and P 2 / 2002
guidelines on IDI in
production ol arms &
ammunition.
1+. Iloriculture, 100% Automatic P + / 2006
Horticulture,
Development ol
Seeds, Animal
Husbandry,
Pisciculture,
aqua-culture,
cultivation ol
vegetables,
musLrooms,under
controlled
conditions and
services related to
agro and allied
sectors.
15. Hazardous 100% Automatic Subject to industrial license P + / 2006
CLemicals, viz., under tLe Industries
Lydrocyanic acid (Development & Regulation)
and its derivatives, Act, 1951 and otLer sectoral
pLosgene and its regulations.
derivatives, and
isocyanates and
diisocyantes ol
Lydrocarbon.
16. Industrial 100% Automatic Subject to industrial license P + / 2006
explosives- under Industries (Development
Manulacture & Regulation) Act, 1951 and
regulations under Explosives
Act, 1898
1/. Insurance 26% Automatic Subject to licensing by tLe P 10 / 2000
Insurance Regulatory &
Development AutLority
www.irda.nic.in .
18. Investing +9% IIPB Ioreign investment in an P 2 / 2000
companies in investing company will not be &
inlrastructure counted towards sectoral cap P 5 / 2005
services sector in inlrastructure /services
(except telecom sector provided tLe investment
sector) is up to +9% and tLe
management ol tLe company
is in Indian Lands.
19. Mining covering 100% Automatic Subject to Mines & Minerals P 2 / 2000
exploration and (Development &Regulation) P 3 / 2005
mining ol Act, 195/www.mines.nic.in &
diamonds & Press ote 18 (1998) and P + / 2006
precious stones, Press ote 1 (2005) are not
gold, silver and applicable lor setting up 100%
minerals. owned subsidiaries in so lar
as tLe mining sector is
concerned, subject to a
declaration lrom tLe
applicant tLat Le Las no
existing joint venture lor tLe
same area and / or tLe
particular mineral.
20. on Banking Iinancc Companics- approvcd activitics
i) MercLant banking 100% Automatic Subject to: P 2/2000
ii) Lnderwriting a. minimum P 6/2000 &
iii) Portlolio capitalization norms lor P 2/2001
Management lund based BICs -
Services LS$ 0.5 million to be
iv) Investment brougLt uplront lor IDI
Advisory Services up to 51 %, LS$ 5 million
v) Iinancial to be brougLt uplront lor
Consultancy IDI above 51 %
vi) Stock Broking and up to /5%, and
vii) Asset LS$ 50 million out ol
Management wLicL LS$ /.5 million to
viii) Venture Capital be brougLt uplront and
ix) Custodial Services tLe balance in 2+ montLs
x) Iactoring lor IDI beyond /5%
xi) Credit Relerence and up to 100%.
ANNEXURES
94
Agencies b. minimum
xii) Credit Rating capitalization norms
Agencies lor non-lund based
xiii) Leasing & BIC activities- LS$
Iinance 0.5 million.
xiv) Housing Iinance c. loreign investors can
xv) Iorex Broking set up 100% operating
xvi) Credit Card subsidiaries witLout
Business tLe condition to disinvest
xvii) Money cLanging a minimum ol 25% ol its
Business equity to Indian entities
xviii) Micro credit subject to bringing in
xix) Rural credit. LS$ 50 million witLout
any restriction on number
ol operating subsidiaries
witLout bringing
additional capital.
d. joint venture operating
BIC's tLat Lave /5% or
less tLan /5% loreign
investment will also be
allowed to set up
subsidiaries lor
undertaking otLer BIC
activities subject to
subsidiaries also
complying witL tLe
applicable minimum
capital inllow.
e. compliance witL tLe
guidelines ol tLe RBI.
21. Pctrolcum & atural Cas scctor
a. CtLer tLan 100% Automatic Subject to sectoral regulations P 1/200+
Relining and issued by Ministry ol &
including market Petroleum & atural Cas, P +/2006
study and and in tLe case ol actual
lormulation, trading and marketing ol
investment petroleum products,
linancing, setting divestment ol 26% equity in
up inlrastructure lavour ol Indian partner/
lor marketing in public witLin 5 years.
Petroleum & www.petroleum.nic.in
atural Cas
sector.
b. Relining 26% in case IIPB Subject to sectoral policy P 2/2000
ol PSLs (in case www.petroleum.nic.in
100% ol PSLs)
case Private Automatic
companies (in case ol
private
companies)
22. Print Mcdia
a. PublisLing ol 26% IIPB Subject to guidelines notilied
newspaper and by Ministry ol Inlormation
periodicals & Broadcasting.
dealing witL news www.mib.nic.in
and current allairs
b. PublisLing ol 100% IIPB Subject to guidelines issued P 1 / 200+
scientilic by Ministry ol Inlormation
magazines / & Broadcasting.
specialty www.mib.nic.in
journals/
periodicals
23. Power including 100% Automatic Subject to provisions ol tLe P 2 / 1998
generation (except Electricity Act. 2003 P / / 2000
Atomic energy), www.powermin.nic.in &
transmission, P + / 2006
distribution and
Power Jrading.
2+. Jea Sector. 100% IIPB Subject to divestment ol 26% P 6 / 2002
Including tea equity in lavour ol Indian
plantation partner/Indian public witLin
5 years and prior approval ol
State Covernment lor cLange
in land use.
25. Tclccommunication
a. Basic and cellular, /+%(Including Automatic Subject to guidelines P 5 / 2005
Lnilied Access IDI, IlI, RI, Lp to +9% notilied in tLe P 5
Services, ational/ ICCBs, ADRs, (2005 Series).
international CDRs, IIPB
Long Distance, convertible Beyond
V-Sat, Public prelerence +9%
Mobile Radio sLares, and
Jrunked Services proportionate
(PMRJS), Clobal loreign equity
ANNEXURES
96
Mobile Personal in Indian
Communications promoters/
Services (CMPCS) Investing
and otLer value Company)
added telecom
Services
b. ISP witL /+% Automatic Subject to licensing and P + / 2001
gateways, radio- up to +9% security requirements
paging, end to end notilied by tLe Department
bandwidtL. IIPB ol Jelecommunications
Beyond www.dotindia.com
+9%
c. ISP witLout 100% Automatic Subject to tLe condition P 9 / 2000
gateway, up to +9% tLat sucL companies sLall
inlrastructure divest 26% ol tLeir equity in
provider IIPB lavour ol Indian public in
providing dark Beyond 5 years, il tLese companies
libre, electronic +9% are listed in otLer parts ol tLe
mail and voice world. Also subject to
mail licensing and security
requirements, wLere required.
www.dotindia.com
d. Manulacture ol 100% Automatic Subject to sectoral P 2 / 2000
telecom requirements.
equipments www.dotindia.com
26. Trading
a. WLolesale / 100% Automatic Subject to guidelines lor P + / 2006
casL & carry IDI in trading issued by
trading Department ol Industrial
Policy & Promotion vide
Press ote 3 (2006Series).
b. Jrading lor 100% Automatic
exports
c. Jrading ol items 100% IIPB
sourced lrom
small scale sector
d. Jest marketing ol 100% IIPB
sucL items lor
wLicL a company
Las approval lor
manulacture
e. Single Brand 51% IIPB
Product
retailing
2/. Satellites /+% IIPB Subject to sectoral guidelines
EstablisLment issued by Department ol
And operation Space /ISRC
www.isro.org
28. Special Economic 100% Automatic Subject to Special Economic P 9 / 2000
Zones And Iree Zones Act, 2005 and tLe P 2 /2006
Jrade WareLousing Ioreign Jrade Policy. P + / 2006
Zones covering www.sezindia.nic.in
setting up ol
tLese Zones and
setting up units
in tLe Zones
ANNEXURES
98
Annexure-III
ILLLSTBATIVE LIST CI SECTCBS LDEB ALTCMATIC BCLTE
ICB IDI LPTC 100%
Most manulacturing activities
on-banking linancial services
Drugs and pLarmaceuticals
Iood processing
Electronic Lardware
Soltware development
Iilm industry
Advertising
Hospitals
Private oil relineries
Pollution control and management
Exploration and mining ol minerals otLer tLan diamonds and precious stones
Management consultancy
Venture capital lunds/companies
Setting up/development ol industrial park/model town/SEZ
Petroleum Products Pipeline
Annexure-IV
ILLLSTBATIVE LIST CI IIBASTBLCTLBE SECTCBS WITH IDI
LPTC 100% LDEB ALTCMATIC BCLTE
Electricity Ceneration (except Atomic energy)
Electricity Jransmission
Electricity Distribution
Mass Rapid Jransport System
Roads & HigLways
Joll Roads
VeLicular Bridges
Ports & Harbours
Hotel & Jourism
JownsLips, Housing, Built-up Inlrastructure and Construction Development Project
ANNEXURES
100
Annexure-V
ILLLSTBATIVE LIST CI SEBVICES SECTCB WITH IDI LPTC 100%
LDEB ALTCMATIC BCLTE
Advertising and Iilms
Computer related Services
ResearcL and Development Services
Construction and related Engineering Services
Pollution Control and Management Services
Lrban Planning and Landscape Services
ArcLitectural Services
HealtL related & Social Services
Jravel related services
Road Jransport Services
Maritime Jransport Services
Internal Waterways Jransport Services
Annexure-VI
IDLSTBIAL LICESIC
At present industrial license lor manulacturing is required only lor tLe lollowing :
i. Industries retained under compulsory licensing,
ii. Manulacture ol items reserved lor small scale sector by non-SSI units, and
iii. WLen tLe proposed location attracts locational restriction
IDLSTBIES BEQLIBIC CCMPLLSCBY LICESIC
JLe lollowing industries require compulsory industrial license :
i. Distillation and brewing ol alcoLolic drinks.
ii. Cigars and cigarettes ol tobacco and manulactured tobacco substitutes,
iii. Electronic Aerospace and delence equipment: all types,
iv. Industrial explosives, including detonating luses, salety luses, gun powder, nitrocellulose and matcLes,
v. Hazardous cLemicals,
a. Hydrocyanic acid and its derivatives
b. PLosgene and its derivatives
c. Isocyanates and di-isocyanates ol Lydrocarbon, not elsewLere specilied (example: MetLyl Isocyanate).
ANNEXURES
102
Annexure-VII
EXTBACTS IBCM MASTEB CIBCLLAB C ICBEIC
IVESTMETS I IDIA
1. Acquisition and Transfcr of Immovablc Propcrty in India.
1.1 A person resident outside India wLo is a citizen ol India (RI) can acquire by way ol purcLase any
immovable property in India otLer tLan agricultural/ plantation /larm Louse. He may transler any immovable
property otLer tLan agricultural or plantation property or larm Louse to a person resident outside India wLo
is a citizen ol India or to a person ol Indian origin resident outside India or a person resident in India . He
may transler, agricultural land/ plantation property/ larm Louse only to Indian citizens permanently residing
in India.
1.2. A person resident outside India wLo is a person ol Indian Crigin ( PIC) can acquire any immovable
property in India otLer tLan agricultural land/ larm Louse/ plantation property :-
a) By way ol purcLase out ol lunds received by way ol inward remittance tLrougL normal banking cLannels
or by debit to Lis RE/ICR(B)/RC account.
b) By way ol gilt lrom a person resident in India or a RI or a PIC.
c) By way ol inLeritance lrom a person resident in India or a person resident outside India wLo Lad
acquired sucL property in accordance witL tLe provisions ol tLe loreign excLange law in lorce or IEMA
regulations at tLe time ol acquisition ol tLe property.
1.3 A PIC may transler any immoveable property otLer tLan agricultural land/Plantation property/larmLouse
in India
a) By way ol sale to a person resident in India.
b) By way ol gilt to a person resident in India or a on Resident Indian or a PIC..
1.+ A PIC may transler agricultural Land/ Plantation property /larmLouse in India by way ol sale or gilt to
person resident in India wLo is a citizen ol India
2. Purchasc/ Salc of Immovablc Propcrty by Iorcign Embassics/ Diplomats/
Consulatc Ccncral
Ioreign Embassy/Consulate as well as Diplomatic personnel in India are allowed to purcLase/ sell immovable
property in India otLer tLan agricultural land/ plantation property / larm Louse provided (i) clearance lrom
Covernment ol India, Ministry ol External Allairs is obtained lor sucL purcLase/ sale, and (ii) tLe consideration
lor acquisition ol immovable property in India is paid out ol lunds remitted lrom abroad tLrougL banking
cLannel.
3. Acquisition of Immovablc Propcrty for carrying on a pcrmittcd activity
A person resident outside India wLo Las a brancL, ollice or otLer place ol business, (excluding a liaison
ollice) lor carrying on Lis business activity witL requisite approvals, in India may acquire an immovable
property in India wLicL is necessary lor or incidental to carrying on sucL activity provided tLat all applicable
laws, rules, regulations or directions lor tLe time being in lorce are duly complied witL. JLe entity/concerned
person is required to lile a declaration in tLe lorm IPI witL tLe Reserve Bank, witLin ninety days lrom tLe
date ol sucL acquisition. JLe non-resident is eligible to transler by way ol mortgage tLe said immovable
property to an autLorised dealer as a security lor any borrowing.
4. Bcpatriation of salc procccds
In tLe event ol sale ol immovable property otLer tLan agricultural land/ larm Louse/ plantation property in
India by RI/PIC, tLe autLorised dealer will allow repatriation ol sale proceeds outside India provided,
i) JLe immovable property was acquired by tLe seller in accordance witL tLe provisions ol tLe loreign
excLange law in lorce at tLe time ol acquisition by Lim or tLe provisions ol IEMA Regulations,
ii) JLe amount to be repatriated does not exceed (a) tLe amount paid lor acquisition ol tLe immovable
property in loreign excLange received tLrougL normal banking cLannels or out ol lunds Leld in Ioreign
Currency on-Resident Account or (b) tLe loreign currency equivalent as on tLe date ol payment, ol
tLe amount paid wLere sucL payment was made lrom tLe lunds Leld in on-Resident External account
lor acquisition ol tLe property.
iii) In tLe case ol residential property, tLe repatriation ol sale proceeds is restricted to not more tLan two
sucL properties.
iv) In tLe case ol sale ol immovable property purcLased out ol Rupee lunds, ADs may allow tLe lacility ol
repatriation ol lunds out ol balances Leld by RIs/PIC in tLeir on-resident Rupee( RC) accounts
upto LS$ 1 mio per calendar year subject to production ol undertaking by tLe remitter and a certilicate
lrom tLe CLartered Accountant in tLe lormats prescribed by tLe CBDJ.
5. Prohibition on acquisition or transfcr of immovablc propcrty in India by
citizcns of ccrtain countrics
5.1 o person being a citizen ol Pakistan, BangladesL, Sri Lanka, AlgLanistan, CLina, Iran, epal or BLutan
sLall acquire or transler immovable property in India, otLer tLan lease, not exceeding live years witLout prior
permission ol Reserve Bank.
5.2 Ioreign national ol non-Indian origin resident outside India are not permitted to acquire any immovable
property in India unless sucL property is acquired by way ol inLeritance lrom a person wLo was resident in
India.
5.3 Ioreign ationals ol non Indian origin wLo Lave acquired immovable property in India witL tLe specilic
approval ol tLe Reserve Bank cannot transler sucL property witLout prior permission ol tLe Reserve Bank.
ANNEXURES
104
Annexure-VIII
EXTBACTS IBCM THE MASTEB CIBCLLAB - Bcmittancc facilitics for
on-Bcsidcnt Indians/Pcrsons of Indian Crigin/Iorcign ationals
Bcmittancc facilitics for BIs/PIC and Iorcign ationals
JLe guidelines lor transler ol assets outside India by a person wLetLer resident in India or not are given in tLe
otilications o. IEMA 13/2000-RB and IEMA 21/2000-RB botL dated May 3, 2000 and tLe amendments
issued tLereto lrom time to time.
According to tLe above otilications, remittance ol capital assets in India Leld by a person wLetLer resident
in or outside India would require approval ol tLe Reserve Bank except to tLe extent provided in tLe Act or
Rules or Regulations made under tLe Act.
1. Bcmittancc of asscts by a forcign national of non-Indian origin
1.1 A loreign national ol non-Indian origin wLo Las retired lrom an employment in India or wLo Las inLerited
assets lrom a person resident in India or wLo is a widow ol an Indian citizen resident in India may remit an
amount not exceeding LSD one million, per calendar year, on production ol documentary evidence in support
ol acquisition/ inLeritance ol assets, an undertaking by tLe remitter and certilicate by a CLartered Accountant
in tLe lormats prescribed by tLe Central Board ol Direct Jaxes vide tLeir Circular o.10/2002 dated Cctober
9, 2002.
1.2 JLese remittance lacilities are not available to a citizen ol epal and BLutan.
1.3 JLe remittance lacility in respect ol sale proceeds ol immovable property is not available to a citizen ol
Pakistan, BangladesL, Sri Lanka, CLina, AlgLanistan, Iran, epal and BLutan.
2. Bcmittancc of asscts by BI/PIC
2.1 A on-Resident Indian (RI) or a Person ol Indian Crigin (PIC) may remit an amount upto LSD one
million, per calendar year, out ol tLe balances Leld in Lis on-Resident (Crdinary) Rupee (RC) account/
sale proceeds ol assets (inclusive ol assets acquired by way ol inLeritance or settlement), lor all bonalide
purposes, to tLe satislaction ol tLe autLorized dealer, on production ol an undertaking by tLe remitter and
certilicate by a CLartered Accountant in tLe lormats prescribed by tLe Central Board ol Direct Jaxes vide
tLeir Circular o.10/2002 dated Cctober 9, 2002.
2.2 RI/PIC may remit sale proceeds ol immovable property purcLased by Lim out ol Rupee lunds or as
a person resident in India as indicated in para 2.1 above.
2.3 In respect ol remittance ol sale proceeds ol assets acquired by way ol inLeritance or legacy or settlement
lor wLicL tLere is no lock-in period, RI/PIC may submit documentary evidence in support ol inLeritance
or legacy ol assets, an undertaking by tLe remitter and certilicate by a CLartered Accountant in tLe lormats
prescribed by tLe Central Board ol Direct Jaxes vide tLeir Circular o.10/2002 dated Cctober 9, 2002.
2.+ It is clarilied tLat settlement is also a mode ol inLeritance lrom tLe parent, tLe only dillerence being
tLat tLe property under tLe settlement passes to tLe beneliciary on tLe deatL ol tLe owner/parent witLout
any legal procedures/Lassles and Lelps in avoiding delay and inconvenience in applying lor probate, etc
2.5 JLe remittance lacility in respect ol sale proceeds ol immovable property is not available to a citizen ol
Pakistan, BangladesL, Sri Lanka, CLina, AlgLanistan, Iran, epal and BLutan.
3. Bcpatriation of salc procccds of rcsidcntial propcrty purchascd by BIs/PICs
out of forcign cxchangc
3.1 JLere is no lock-in period lor sale ol residential property purcLased by RI/PIC out ol loreign excLange.
However, repatriation ol sale proceeds ol residential property purcLased by RI/PIC out ol loreign excLange
is restricted to not more tLan two sucL properties.
3.2 AutLorized dealers may permit repatriation ol amounts representing tLe relund ol application/earnest
money/purcLase consideration made by tLe Louse building agencies/seller on account ol non-allotment ol
llat/plot/cancellation ol bookings/deals lor purcLase ol residential/ commercial property, togetLer witL
interest, il any (net ol income tax payable tLereon), provided tLe original payment was made out ol RE/
ICR account ol tLe account Lolder, or remittance lrom outside India tLrougL normal banking cLannels
and tLe autLorized dealer is satislied about tLe genuineness ol tLe transaction. SucL lunds may also be
credited to tLe RE/ICR account ol tLe RIs/PICs, il tLey so desire.
3.3 AutLorized dealers may allow repatriation ol sale proceeds ol residential accommodation purcLased by
RIs/PICs out ol lunds raised by tLem by way ol loans lrom tLe autLorized dealers/Lousing linance
institutions to tLe extent ol sucL loan/s repaid by tLem out ol loreign inward remittances received tLrougL
normal banking cLannel or by debit to tLeir RE/ICR accounts.
4. Bcmittancc of currcnt incomc
+.1 Remittance ol current income like rent, dividend, pension, interest etc. ol RIs/PICs wLo do not
maintain RC Account is lreely allowed, on tLe basis ol appropriate certilication by a CLartered Accountant
certilying tLat tLe amount proposed to be remitted is eligible lor remittance and tLat applicable taxes Lave
been paid/provided lor.
+.2 RIs/PICs Lave tLe option to credit tLe current income to tLeir on-Resident (External) Rupee
account, provided tLe autLorized dealer is satislied tLat tLe credit represents current income ol tLe non-
resident account Lolder and income tax tLereon Las been deducted/provided lor.
5. Iacilitics for studcnts
5.1 Students going abroad lor studies are treated as on-Resident Indians (RIs) and are eligible lor all tLe
lacilities available to RIs under IEMA.
ANNEXURES
106
5.2 As on-Residents, tLey will be eligible to receive remittances lrom India (i) upto LSD 100,000 lrom
close relatives in India on sell declaration towards maintenance, wLicL could include remittances towards
tLeir studies also and (ii) upto LSD 1 million out ol sale proceeds ol assets/balances in tLeir account
maintained witL an AD in India.
5.3 All otLer lacilities available to RIs under IEMA are equally applicable to tLe students.
5.+ Educational and otLer loans availed ol by tLem as residents in India will continue to be available as per
IEMA regulations.
6. Incomc- tax clcarancc
JLe remittances will be allowed to be made by tLe autLorized dealers on production ol an undertaking by tLe
remitter and a Certilicate lrom a CLartered Accountant in tLe lormats prescribed by tLe Central Board ol
Direct Jaxes, Ministry ol Iinance, Covernment ol India in tLeir Circular o.10/2002 dated Cctober 9,
2002. cl. our AP(DIR Series) Circular o.56 dated ovember 26, 2002].
7. Intcrnational Crcdit Cards
AutLorized dealers Lave been permitted to issue International Credit Cards to RIs/PICs, witLout prior
approval ol RBI. SucL transactions may be settled by inward remittance or out ol balances Leld in tLe
cardLolder's ICR/RE/on-Resident (Crdinary) Rupee accounts.
IEEDBACK ICBM
Kindly give us your leedback on tLe document as tLis will Lelp us in making tLe revised edition ol tLis book
more valuable. We will be obliged il any mistake, error or discrepancy is brougLt to our notice lor carrying
out necessary corrections and modilications.
SLCCESTICS
Please mail/lax/e-mail your suggestions to:
Ms. SandLya SLukla
Director
Jel.: 268/+231, 2+19/918
E-Mail: dirss_moia.nic.in
Ms. Anupma Aggarwal
Partner
PeeyusL Aggarwal & Co.
CLartered Accountants
B-132, Anand ViLar
DelLi-110 092, India
Jel: 91-11-2216+/00, 2216+800
Iax: 91-11-2216+800
Mobile: 91-93122/6/31
E-Mail: anupma_indialiaison.com
website: www.indialiaison.com
www.moia.gov.in
www.overseasindian.in

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