DPIIT clarified in its recent press release that downstream investment by a company owned and controlled by non-resident Indians (NRIs) on a non-repatriation basis will not be considered foreign direct investment (FDI).

  • Investment by NRIs on a non-repatriation basis are deemed to be domestic investment at par with the investments made by residents.
  • Investment on repatriation basis means the sale of maturity proceeds of an investment, net of taxes, are eligible to transferred out of India.

Please see below the brief from the press note issued by DPIIT on Review of the FDI Policy on downstream investments made by Non- Resident Indians (NRIs):

1Notification date19.03.2021
2SubjectReview of the FDI Policy on downstream investments made by Non- Resident Indians (NRIs)
3Effective dateThe decision will take effect from the date of FEMA notification
4ApplicabilityApplicable on Investment made by NRIs.

 Brief description

The Government of India was reviewed the extant FDI policy in relation to investments made by a Indian company owned and controlled by Non-Resident Indians (NRIs) on a non-repatriation basis and in order to prove clarity on downstream investments made following addition in the consolidated FDI Policy Circular of 2020 (FDI Policy) effective from 15.10.2020, and as amended from time to time.  

“An investment made by an Indian entity which is owned and controlled by NRI(s) on a non-repatriation basis shall not be considered for calculation of indirect foreign investment.”