Summary on Foreign Direct Investment Government of India with the objective of attracting and promoting foreign direct investment

has put in place transparent, predictable and comprehensive policy framework on Foreign Direct Investment. The Department of Industrial olicy and romotion !DI ", #inistry of $ommerce % Industry makes policy pronouncements on FDI through ress &otes' ress (eleases. The same are notified by (eserve )ank of India as amendments to the Foreign *+change #anagement !Transfer or Issue of ,ecurity by ersons (esident -utside India" (egulations, .///. In case of any conflict, the relevant F*#0 &otification will prevail. The present consolidation is effective from 0pril 1, ./23 and subsumes and supersedes all ress &otes' ress (eleases'clarifications'circulars issued by DI .

CAPS ON INVESTMENTS ENTRY CONDITIONS ON INVESTMENT the investment'investors are re4uired to comply with all relevant sectoral laws, regulations, rules, security conditions, and state' local laws' regulations FOREIGN INVESTMENT INTO DO!NSTREAM INVESTMENT "Y INDIAN COMPANIES Foreign investment into an Indian company, engaged only in the activity of investing in the capital of other Indian company'ies, will re4uire prior Government'FI ) approval. $ore Investment companies will be re4uired obtain prior Government ' FI ) approval and will have to additionally follow ()I (egulatory Framework for $I$s. Indian companies which does not have any operations and downstream investment will be re4uired to obtain Government ' FI ) approval and when such companies commences business or makes downstream investment they will have to comply with the relevant sectoral conditions on entry route, conditionalities and cap Direct foreign investment 5 means investment by non resident in an Indian company Indirect foreign investment 5 means Indian investing company having foreign investment Indirect Foreign Investment includes all types of foreign investment like FDI, investment by FIIs6 &(Is, 0D(s, GD(s, Foreign currency convertible bonds !F$$)", fully, compulsorily and mandatory convertible preference shares and fully, compulsorily and mandatorily convertible debentures Gui#e$ines %or ca$cu$ation o% tota$ %oreign investment in an In#ian com&any The total foreign investment is sum total of Direct Foreign Investment of7 'i( Direct Foreign Investment which means all investment directly by a non resident entity into the Indian $ompany is counted towards direct investment

'ii( In#irect Foreign Investment which means the entire investment by the investing company which is owned and controlled by non resident entities into the subject Indian company is considered as Indirect Foreign Investment &ote7 Foreign investment through the Indian company is not considered as Indirect foreign investment The above calculation apply at every stage of investment into Indian companies and to each and every Indian $ompany 0dditionally companies need to fulfill conditions like furnishing full details of the foreign investment including ownership details, information control about the company, informing about the agreement which have effect on the appointment of the board of Directors or on the e+ercise of voting rights or creating voting rights disproportionate to shareholding or incidental matters thereto for seeking Government approval. In all sectors attracting sectoral caps, the balance e4uity i.e. beyond the sectoral foreign investment cap, would specifically be beneficially owned by'held with'in the hands of resident Indian citi8ens and Indian companies, owned and controlled by resident Indian citi8ens. In the I% ) and Defence sectors where the sectoral cap is less than 9:;, the company would need to be owned an# controlled by resident Indian citi8ens and Indian companies, which are owned and controlled by resident Indian citi8ens. The policy and methodology does not apply to Insurance ,ector and to the foreign investment already made in accordance with the guidelines in e+istence prior to February 23, .//: will not re4uire any modifications to confirm to these guidelines FDI is &ro)i*ite# in+ !a" <ottery )usiness including Government 'private lottery, online lotteries, etc. !b" Gambling and )etting including casinos etc. !c" $hit funds !d" &idhi company !e" Trading in Transferable Development (ights !TD(s" !f" (eal *state )usiness or $onstruction of Farm =ouses !g" #anufacturing of $igars, cheroots, cigarillos and cigarettes, of tobacco or of tobacco substitutes !h" 0ctivities ' sectors not open to private sector investment e.g. 0tomic *nergy and (ailway Transport !other than #ass (apid Transport ,ystems". &ote7 Foreign technology collaboration in any form including licensing for franchise, trademark, brand name, management contract is also prohibited for <ottery )usiness and Gambling and )etting activities