The record
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- The Reserve Bank of India has released draft rules to simplify and modernize India's foreign investment regulations, with public comments open until 31 August.
- The key change is a clear separation of the government's sectoral FDI policy from the RBI's operational Foreign Exchange Management Act (Fema) provisions, with RBI handling payment modes and reporting while DPIIT interprets investment policy.
- The draft also broadens eligible investee entities to explicitly include Sebi-regulated vehicles such as Reits, InvITs, AIFs, mutual funds and ETFs, and consolidates the various modes through which foreign investors can invest in Indian equity.
- The finance ministry says the changes will reduce compliance requirements and attract a broader pool of stable foreign retail investors.
What to watch next
- Feedback received during the public comment period ending 31 August
- Final notification of the rules by RBI after consultations
- Implementation of the expanded portfolio investment scheme limits of 10% for individual and 24% aggregate for persons resident outside India
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Named India · Mumbai · Department for Promotion of Industry and Internal Trade · Department of Economic Affairs · Ministry of Finance · Reserve Bank of India · Securities and Exchange Board of India · Subhana Shaikh
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