A. P. (DIR Series) Circular No. 23 dated 14th August, 2013

Presently, an Indian Party can invest under the Automatic Route up to 400% of its net worth as on the date of the last audited balance sheet in all its overseas Joint Ventures (JV)/Wholly Owned Subsidiaries (WOS) engaged in any bona fide business activity.

This circular has reduced the above limit of 400% of net worth to 100% of net worth in case of all fresh Overseas Direct Investment proposals under the Automatic Route. Also, in case of fresh investment in overseas unincorporated entities in the energy and natural resources sectors, the above limit of 400% of net worth has been reduced to 100% of net worth in case of all fresh Overseas Direct Investment proposals under the Automatic Route. ODI in excess of 100% of the net worth will be considered by RBI under the Approval Route. Existing JV/WOS set up under earlier regulations will continue to be governed by the same.

However, there is no change as regards investment overseas under the Automatic Route by Navratna Public Sector Undertakings (PSUs), ONGC Videsh Limited (OVL) and Oil India Ltd (OIL), in overseas unincorporated entities and the overseas incorporated entities in the oil sector (i.e., for exploration and drilling for oil and natural gas, etc.), which are duly approved by the Government of India. They can invest without any limit.