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August 2014

A. P. (DIR Series) Circular No. 1 dated 3rd July, 2014

By Gaurang Gandhi Chartered Accountant
Reading Time 1 mins
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Financial Commitment (FC) by Indian Party under Overseas Direct Investments (ODI ) – Restoration of Limit

Presently,
the limit for Overseas Direct Investments (ODI) /Financial Commitment
(FC) to be undertaken by an Indian Party under the automatic route is
100% of the net worth of the Indian Party as per its last audited
balance sheet.

This circular has restored the said limit to the
one that existed prior to 14th August, 2013. Hence now the limit for
Overseas Direct Investments (ODI)/Financial Commitment (FC) to be
undertaken by an Indian Party under the automatic route is 400% of the
net worth of the Indian Party as per its last audited balance sheet.
However, where the financial commitment of the Indian Party exceeds US$ 1
billion (or its equivalent) in a financial year prior permission of RBI
will need to be obtained even if the total FC of the Indian Party is
within the limit of 400% of its net worth as per the last audited
balance sheet.

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