Lok Sabha Question No. 775 (UNSTARRED), answered on 2015-07-24
Subject: Review of FDI Policy
Ministry: COMMERCE AND INDUSTRY
Asked by: NAGENDRA KUMAR PRADHAN, ADVOCATE NARENDRA KESHAV SAWAIKAR, SUSHMITA DEV, KALIKESH NARAYAN SINGH DEO, GAURAV GOGOI, ASHWINI KUMAR

**GOVERNMENT OF INDIA**

**MINISTRY OF COMMERCE & INDUSTRY**

**DEPARTMENT OF INDUSTRIAL POLICY & PROMOTION**

**LOK SABHA**

**UNSTARRED QUESTION NO. 775.**

**TO BE ANSWERED ON FRIDAY, THE 24** **TH** **JULY, 2015.**

**REVIEW OF FDI POLICY**

**775. 	SHRI NAGENDRA KUMAR PRADHAN:**

**ADV. NARENDRA KESHAV SAWAIKAR:**

**KUMARI SUSHMITA DEV:**

**SHRI KALIKESH N. SINGH DEO:**

**SHRI GAURAV GOGOI:**

**SHRI ASHWINI KUMAR:**

Will the Minister of **COMMERCE AND INDUSTRY** be pleased to state:

**वाणिज्‍य एवं उद्योग मंत्री**

1. whether any change has been recorded in the share of investment by Non-Resident Indians (NRIs), Persons of Indian Origin (PIOs) and Overseas Citizens of India (OCIs) in Foreign Direct investment (FDI) during the last one year;

1. if so, the details thereof indicating the share of FDI equity inflow and FDI inflow in investments therefrom during the said period;

1. whether the Government has reviewed/amended or proposes to review/amend FDI policy on investments by them, if so, the details thereof indicating the proposed changes/amendments and the reasons therefor; and

1. the extent to which foreign investors interested for investment and participation in Make in India programme are likely to be benefited from such changes/amendments?

**ANSWER**

**वाणिज्‍य एवं उद्योग राज्‍यमंत्री (स्‍वतंत्र प्रभार)(श्रीमती निर्मला सीतारमण)**

**THE MINISTER OF STATE (INDEPENDENT CHARGE)**

**OF THE MINISTRY OF COMMERCE & INDUSTRY**

**(SHRIMATI NIRMALA SITHARAMAN)**

| &(b):   | The investments made by NRIs under foreign direct investments (FDI) route for the period 2013-14 and 2014-15 are at  **Annexure-I.**  The definition of NRI includes PIO who is defined as a citizen of any country other than Bangladesh or Pakistan, who had (i) at any time held Indian passport or (ii) he or either of his parents or any of his grandparents was a citizen of India by virtue of the Constitution of India or the Citizenship Act, 1955 or (iii) the person is a spouse of an Indian citizen or a person referred to in (i) or (ii).  No separate definition for OCI is provided in FEMA ,1999 so far (the changes in Definition of NRI in terms of Press Note 7 of 2015 dated 03.06.2015 (  **Annexure-II**  ) are being given effect to) and accordingly no data is available for this class of investors.   |
|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (c):    | Review of Foreign Direct Investment (FDI) policy is an ongoing process. The Government makes significant changes in the FDI policy regime, from time to time, to ensure that India remains increasingly attractive and investor-friendly.  In a recent review of FDI policy on Investment by NRIs, PIOs and OCIs, announced through Press Note 7 of 2015 dated 03.06.2015, the FDI policy provisions pertaining to NRI investment have been clarified to provide that for the purposes of FDI policy, investment by NRIs on non-repatriation basis under Schedule 4 of FEMA (Transfer or Issue of Security by Persons Resident Outside India) Regulations will be deemed to be domestic investment at par with the investment made by residents.                                                                                     |
| (d):    | No such data is maintained centrally.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |

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**ANNEXURE-I**

**ANNEXURE-I REFERRED TO IN REPLY TO PARTS (a) & (b) OF LOK SABHA UNSTARRED QUESTION NO. 775 FOR ANSWER ON FRIDAY, THE 24** **th** **JULY, 2015 ON ‘REVIEW OF FDI POLICY’.**

**FDI INFLOWS RECEIVED FROM NRIs**

**(Rs. Crore)**

| **Year**   |   **Automatic Route**  ***** |   **Govt. Route**  ***** |   **Total (NRI)**  ***** |   **Total FDI**  **$** |   **NRI Share in FDI (%)** |
|------------|------------------------------|--------------------------|--------------------------|------------------------|----------------------------|
| 2013-14    |                          845 |                        4 |                      848 |                  36046 |                       2.35 |
| 2014-15    |                         2745 |                       39 |                     2784 |                  44291 |                       6.29 |

Data Source:

*  FC-GPR Form filed by companies in Reserve Bank of India.

$ FDI Statistics, DIPP.

******* **ANNEXURE-II**

**ANNEXURE-II REFERRED TO IN REPLY TO PARTS (a) & (b) OF LOK SABHA UNSTARRED QUESTION NO. 775 FOR ANSWER ON FRIDAY, THE 24** **th** **JULY, 2015 ON ‘REVIEW OF FDI POLICY’**

**Government of India**

**Ministry of Commerce & Industry**

**Department of Industrial Policy & Promotion**

**Press Note No. 7 (2015 Series)**

Subject: Review of Foreign Direct Investment (FDI) Policy on Investments by Non Resident Indians (NRIs), Persons of Indian Origin (PIOs) and Overseas Citizens of India (OCIs)

1. **Present Position:**

1.1	Paragraph 2.1.27 of ‘Consolidated FDI Policy Circular of 2015’, effective from May 12, 2015, relating to the definition of Non Resident Indian (NRI), presently reads as below:

*‘Non-Resident Indian’* () means an individual resident outside India who is a   citizen of India or is a person of Indian origin.

1. **Revised Position:**

2.1	The Government of India has reviewed the FDI policy relating to investments by Non Resident Indians (NRIs), Persons of Indian Origin (PIOs) and Overseas Citizens of India (OCIs). It has been decided to amend the definition of Non Resident Indian as contained in the FDI policy, and also to provide that for the purposes of FDI policy, investment by NRIs under Schedule 4 of FEMA (Transfer or Issue of Security by Persons Resident Outside India) Regulations will be deemed to be domestic investment at par with the investment made by residents.

**3.0** Accordingly, the following amendments are made in the ‘Consolidated FDI Policy Circular of 2015’, effective from May 12, 2015:

**(i) Para 2.1.27 is amended to read as below:**

‘Non-Resident Indian’ (NRI) means an individual resident outside India who is a citizen of India or is an ‘Overseas Citizen of India’ cardholder within the meaning of section 7 (A) of the Citizenship Act, 1955. ‘Persons of Indian Origin’ cardholders registered as such under Notification No. 26011/4/98 F.I, dated 19.8.2002, issued by the Central Government are deemed to be ‘Overseas Citizen of India’ cardholders.

**(ii) Insertion of a new para 3.6.2 (vii), after para 3.6.2 (vi) of the Consolidated FDI Policy Circular of 2015:**

Investment by NRIs under Schedule 4 of FEMA (Transfer or Issue of Security by Persons Resident Outside India) Regulations will be deemed to be domestic investment at par with the investment made by residents.

**4.0** The words ‘Non-Resident Indian’ (NRI) / ‘Person of Indian Origin’ (PIO) appearing in the Consolidated FDI Policy Circular of 2015 will be deemed to be having the same meaning as provided at Para 3.0  above.

**5.0** The above decision will take effect from 18.06.2015.

**(Atul Chaturvedi)**

**Joint Secretary to the Government of India**

D/o IPP File No.:  No. 5/2/2015-FC-I dated:  3 rd June, 2015

**Copy forwarded to** :

| 1.     | **Press Information Officer, Press Information Bureau**  - for giving necessary publicity to the above Press Note.   |                                                                                                                                                                                                       |
|--------|----------------------------------------------------------------------------------------------------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 2.  3. | **North Block, New Delhi**  **Reserve Bank of India, Foreign Exchange Department,**  **Mumbai**                      | For suitably incorporating the policy changes in Foreign Exchange Management (Transfer or issue of security by a person resident outside India) Regulations, 2000 and the relevant schedules thereof. |
| 4.     | **NIC in the Department of Industrial Policy and Promotion-**  for uploading the Press Note on DIPP’s website.       |                                                                                                                                                                                                       |
| 5.     | **Hindi Section**  ,  **DIPP**  - for providing Hindi version.                                                       |                                                                                                                                                                                                       |

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