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The Reserve Bank of India regulates the mode of payment and reporting requirements for investment in India by persons resident outside India. Persons resident outside India make payments for equity instruments, investment vehicles, and capital contributions through inward remittances or eligible repatriable accounts. Indian companies, limited liability partnerships, and authorised dealers submit specific returns to the Reserve Bank for foreign investments within stated time periods. Persons who delay reporting pay a late submission fee.
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Reserve Bank of India Foreign Exchange Department Central Office Mumbai Notification No. FEMA. 395/2019-RB October 17, 2019 (Amended upto June 13, 2026) (Amended upto January 15, 2025) (Amended upto April 23, 2024) (Amended upto June 15, 2020) Foreign Exchange Management (Mode of Payment and Reporting of Non-Debt Instruments) Regulations, 2019
In exercise of the powers conferred by section 47 of the Foreign Exchange Management Act, 1999 (42 of 1999) and consequent to the Foreign Exchange Management (Non-Debt Instrument) Rules, 2019, the Reserve Bank makes the following regulations relating to mode of payment and reporting requirements for investment in India by a person resident outside India, namely:
These regulations may be called the Foreign Exchange Management (Mode of Payment and Reporting of Non-Debt Instruments) Regulations, 2019.
They shall come into force from the date of their publication in the Official Gazette .
In these regulations, unless the context requires otherwise, -
'Act' means the Foreign Exchange Management Act, 1999 (42 of 1999);
‘Rules’ means Foreign Exchange Management (Non-Debt Instrument) Rules, 2019;
The words and expressions used but not defined in these regulations shall have the same meanings respectively assigned to them in the Act or the Rules.
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Schedule of the Rules
Instructions on Mode of payment and Remittance of sale proceeds
I. Schedule I
(Purchase or sale of equity instruments of an Indian company by a person resident outside India)
A. Mode of payment
(1) The amount of consideration shall be paid as inward remittance from abroad through banking channels or out of funds held in 1 any repatriable foreign currency or Rupee account maintained in accordance with the Foreign Exchange Management (Deposit) Regulations, 2016 .
Explanation: The amount of consideration shall include:
(2) Equity instruments shall be issued to the person resident outside India making such investment within sixty days from the date of receipt of the consideration.
Explanation: In case of partly paid equity shares, the period of 60 days shall be reckoned from the date of receipt of each call payment.
(3) Where such equity instruments are not issued within sixty days from the date of receipt of the consideration the same shall be refunded to the person concerned by outward remittance through banking channels or by credit to his 3 repatriable foreign currency or Rupee account maintained in accordance with the Foreign Exchange Management (Deposit) Regulations, 2016 , as the case may be within fifteen days from the date of completion of sixty days.
(4) An Indian company issuing equity instruments under this Schedule may open a foreign currency account with an Authorised Dealer in India in accordance with Foreign Exchange Management (Foreign currency accounts by a person resident in India) Regulations, 2016.
B. Remittance of sale proceeds
The sale proceeds (net of taxes) of the equity instruments may be remitted outside India or may be credited to 4 any repatriable foreign currency or Rupee account of the person concerned, maintained in accordance with the Foreign Exchange Management (Deposit) Regulations, 2016 .
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II. Schedule II
(Investments by Foreign Portfolio Investors)
A. Mode of payment
(1) The amount of consideration shall be paid as inward remittance from abroad through banking channels or out of funds held in a foreign currency account and/ or a Special Non-Resident Rupee (SNRR) account maintained in accordance with the Foreign Exchange Management (Deposit) Regulations, 2016 .
(2) Unless otherwise specified in these regulations or the relevant Schedules, the foreign currency account 6 shall be used only and exclusively for transactions under this Schedule.
B. Remittance of sale proceeds
The sale proceeds (net of taxes) of equity instruments and units of REITs, InViTs and domestic mutual fund may be remitted outside India or credited to the foreign currency account or a SNRR account of the FPI.
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III. Schedule III
(Investments by an individual person resident outside India including Non-Resident Indian (NRI) or Overseas Citizen of India (OCI) on repatriation basis)
A. Mode of Payment
(1) The amount of consideration shall be paid as inward remittance from abroad through banking channels or out of funds held in any repatriable deposit account maintained in accordance with the Foreign Exchange Management (Deposit) Regulations, 2016 .
(2) A repatriable rupee account maintained in accordance with the Foreign Exchange Management (Deposit) Regulations, 2016 , shall be designated by an individual person resident outside India and the same shall be used exclusively for investments permitted under this Schedule.
(3) Subscription to National Pension System by NRIs/OCIs shall be paid as inward remittance from abroad through banking channels or out of funds held in any repatriable foreign currency or rupee account or NRO account, maintained in accordance with the Foreign Exchange Management (Deposit) Regulations, 2016 .
B. Remittance of sale proceeds
(1) The sale proceeds (net of taxes) of equity instruments may be remitted outside India or may be credited to designated rupee account of the person concerned.
(2) The sale proceeds (net of taxes) of units of mutual funds and subscription to National Pension System by NRIs/OCIs may be remitted outside India or, may be credited to any account maintained in accordance with the Foreign Exchange Management (Deposit) Regulations, 2016 at the option of the NRI/OCI investor.
IV. Schedule IV
(Investment by NRI or OCI on non-repatriation basis)
A. Mode of Payment
The amount of consideration shall be paid as inward remittance from abroad through banking channels or out of funds held in NRE/ FCNR(B)/ NRO account maintained in accordance with the Foreign Exchange Management (Deposit) Regulations, 2016 .
B. Sale/ maturity proceeds
(1) The sale/ maturity proceeds (net of applicable taxes) of equity instruments or units or disinvestment proceeds of a LLP shall be credited only to the NRO account of the investor, irrespective of the type of account from which the consideration was paid;
(2) The amount invested in equity instruments of an Indian company or the consideration for contribution to the capital of a LLP and the capital appreciation thereon shall not be allowed to be repatriated abroad.
A. Mode of payment
The amount of consideration shall be paid as inward remittance from abroad through banking channels or out of funds held in NRE/ FCNR(B)/ NRO account maintained in accordance with the Foreign Exchange Management (Deposit) Regulations, 2016 .
B. Sale/ maturity proceeds
(1) The disinvestment proceeds shall be credited only to the NRO account of the person concerned, irrespective of the type of account from which the consideration was paid;
(2) The amount invested for contribution to the capital of a firm or a proprietary concern and the capital appreciation thereon shall not be allowed to be repatriated abroad.
V. Schedule V
(Investment by other non-resident investors)
A. Mode of Payment
The amount of consideration shall be paid out of inward remittances from abroad through banking channels.
