RESERVE BANK OF INDIA (RBI)

1. Overseas Investments by Alternative Investment Funds (AIF) Reserve Bank of India (“RBI”) has vide its Circular No.48 dated December 09, 2014, decided to permit an Indian Alternative Investment Fund (“AIF”), registered with SEBI, to invest overseas in terms of the provisions issued under the A.P. (DIR Series) Circulars No. 49 and 50 dated April 30, 2007 and May 04, 2007 respectively. 2. Foreign Direct Investment (FDI) in India – Review of FDI policy – Sector Specific conditions- Railway Infrastructure Foreign Direct Investment (“FDI”) is prohibited in activities / sectors not open to private sector investment e.g., Atomic Energy and Railway Transport (other than Mass Rapid Transport Systems) etc., RBI has vide its Circular No.47 December 8, 2014, notified that the extant FDI policy for railways sector has been reviewed and Department of Industrial Policy and Promotion (“DIPP”) has now permitted 100% FDI in railway Infrastructure sector under automatic route subject to conditions. Accordingly, it has been decided to permit FDI in the “Construction, operation and maintenance” activities of the Railway Transport sector as follows:

1. Suburban corridor projects through PPP
2. High speed train projects,
3. Dedicated freight lines,
4. Rolling stock including train sets, and locomotives/coaches manufacturing and maintenance facilities,
5. Railway Electrification,
6. Signaling systems,
7. Freight terminals,
8. Passenger terminals,
9. Infrastructure in industrial park pertaining to railway line/sidings including electrified railway lines and connectivities to main railway line and
10. Mass Rapid Transport Systems.

Further, Proposal of FDI beyond 49 of the equity of the investee company in sensitive areas from security point of view will be brought before the Cabinet Committee on Security (CCS) for consideration on a case to case basis.” 3. Foreign Direct Investment (FDI) in India – Review of FDI policy – Sector Specific conditions- Defence FDI up to 26 per cent is permitted under Government route in defence industry subject to license under the Industries (Development & Regulation) Act, 1951. Proposals for FDI above 26 per cent and below 49 percent of FDI (includes FDI + FIIs + RFPIs + NRIs + FVCIs + QFIs) would be subject to approval of Cabinet Committee on Security on case to case basis. RBI has vide Circular No. 46 December 8, 2014, notified that the extant FDI policy for Defence sector has been reviewed by DIPP and has now provided a list of Defence items as finalized by Department of Defence Production, Ministry of Defence and has clarified that items not in the list would not require industrial license for Defence purposes. Dual use items having military as well as civilian applications other than those specially mentioned in the list would also not require Industrial License from Defence angle. Further, Department of Defence Production, Ministry of Defence, has finalised the ‘Security Manual for Licensed Defence Industry’. 4. Foreign Direct Investment (FDI) in India – Review of FDI policy – Sector Specific conditions: RBI vide Circular No.45 dated December 8, 2014, has notified the latest FDI policy changes vide “Consolidated FDI Policy”  Circular of 2014 dated April 17, 2014. In order to bring uniformity in the sectoral classification/conditionalities for FDI / foreign investment as notified under the Consolidated FDI Policy Circular with the FEMA Regulations, the position on Annex B of Schedule 1 to Notification No. FEMA. 20/2000-RB dated 3rd May 2000, as amended from time to time, has been suitably revised by amending the notification. 5. Import of Gold (under 20: 80 Scheme) by Nominated Banks / Agencies / Entities RBI has vide Circular No.42 dated November 28, 2014, intimated that the Government of India has decided to withdraw the 20:80 scheme and restrictions placed on import of gold. Accordingly, all instructions issued about the scheme from time to time starting with A.P. (DIR Series) Circular No.25 dated August 14, 2013 stand withdrawn with immediate effect.