DIPP Consolidated FDI Policy Circular 1 of 2010 wef 1st April and all Press Notes repealed, the legal edifice is built on FEMA RBI notifications (Master)

The system of periodic consolidation and updation of Indian Foreign Direct investment (FDI) Policy issued by Department of Industrial Policy & Promotion (DIPP) under Ministry of Commerce & Industry is introduced as an investor friendly measure (as assured by Finance Ministry in his recent Budget Speech).  The draft master Press Note was released for public comments which can be read from Download all Press Notes from 1991 to 2009 issued by DIPP as it proposes to consolidate PNs in 2010 to release a comprehensive FDI policy in India like Master Circulars with a sunset clause of 6 months

Now, it has been decided that from now onwards a consolidated circular (Master Press Notes or Consolidated FDI Policy or Circular 1 of 2010) would be issued every 6 months to update the FDI policy. This consolidated circular will, therefore, be superseded by a circular to be issued on September 30, 2010. (like you wait for RBI Master Circulars on 1st July every year).  While this circular consolidates FDI Policy Framework, the legal edifice is built on notifications issued by RBI under FEMA.

Press Notes are NOT applicable:

All earlier Press Notes/Press Releases/Clarifications on FDI issued by DIPP which were in force and effective as on March 31, 2010 stand rescinded as on March 31, 2010. The present circular consolidates and subsumes all such/these Press Notes/Press Releases/Clarifications as on March 31, 2010.  Enjoy reading the last press note, it won’t kill you any more.  Its just a single document hereon (making the life of a Corporate Legal Consultant easier and interpretations tougher).

Consolidated FDI Policy is APPLICABLE:

With effect from 1st April 2010, the Consolidated FDI Policy will be applicable.  It has the following important categories,

1. ORIGIN, TYPE, ELIGIBILITY, CONDITIONS AND ISSUE/TRANSFER OF INVESTMENT
2. CALCULATION, ENTRY ROUTE, CAPS, ENTRY CONDITIONS ETC. OF INVESTMENT
3. POLICY ON ROUTE, CAPS AND ENTRY CONDITIONS
4. AGRICULTURE
5. INDUSTRY, MINING, MANUFACTURING
6. SERVICES SECTOR
7. REMITTANCE, REPORTING AND VIOLATION/COMPOUNDING
8. ANNEXURES

• Annex-1 Form FC-GPR
• Annex-2 Terms and conditions for transfer of capital instruments from resident to non-resident and vice-versa
• Annex-3 Documents to be submitted by a person resident in India for transfer of shares to a person resident outside India by way of gift
• Annex-4 Definition of "relative" as given in Section 6 of Companies Act, 1956
• Annex-5 Report by the Indian company receiving amount of consideration for issue of shares / convertible debentures under the FDI scheme
• Annex-6 Know Your Customer (KYC) Form in respect of the non-resident investor
• Annex-7 Form FC-TRS
• Annex-8 Form DR
• Annex-9 Form DR – Quarterly

Definitions

CAPITAL
Means
Compulsorily, Mandatorily and Fully convertible
Preference Shares	Debenture Shares
and includes
DR’S	FCCB’s

Any many more interesting definitions, concepts, provisions, etc…

Download Circular 1 of 2010 on FDI Policy