Mehta & Mehta

India is the seventh largest and the second most populous country in the world. It is also the 4th largest economy in the world. A series of ambitious economic reforms aimed at deregulating the economy and stimulating the foreign investment has moved India into the front-runners of the rapidly growing Asia Pacific Region and unleashed the latent strength of a complex and radically changing nation. Today India is one of the most exciting markets in the world. Skilled managerial and technical manpower that matches the best available in the world and a middle class whose size exceeds the population of the USA or the European Union, provide India with a distinct cutting edge in global competition. India's time tested institutions offer foreign investors a transparent environment that guarantees the security of their long-term investments. These include free and vibrant press, a well-established judiciary, a sophisticated legal and accounting system and a user-friendly intellectual infrastructure. India's dynamic and highly competitive private sector has long been the backbone of its economic activity and offers considerable scope for foreign direct investment, joint ventures and collaborations.

Foreign Institutional Investors have been permitted to invest in Indian securities markets since September, 1992 when the Government of India issued the Guidelines for Foreign Institutional Investment. In November 1995, the SEBI (Foreign Institutional Investors Regulations,1995) have also been notified. The Regulations require FIIs to register with the SEBI and obtain approval from the Reserve Bank of India under the Foreign Exchange Regulation Act,1973 and now under the Foreign Exchange Management Act,1999 to enable them to buy and sell securities, to open foreign currency and rupee bank accounts and to remit and repatriate funds.

FIIs who fulfill the conditions under Regulation 6 of the the SEBI (Foreign Institutional Investors Regulations,1995), can make an application for registration in the required format in duplicate, one set each for SEBI and RBI. Both sets have to be sent to SEBI only. The eligibility is generally conveyed within 3-4 weeks of receipt of application by SEBI.

Registration granted by SEBI to FIIs is not transferable. However, the registration can be renewed, by making an application for renewal, three months before the expiry of the period of certificate of registration., along with the necessary renewal fee.

Regsitration of Domestic Asset Management Companies and Portfolio Managers as FII:

Asset Management Companies and Portfolio Managers registered with SEBI can register themselves as FII to manage foreign investments in the Indian Capital Market through Portfolio Investment Route. These entities would be subject to the same regulations as stipulated in SEBI (Foreign Institutional Investors) Regulation,1995

Corporates registered under the Companies Act except financial intermediaries (such as banks, financial institutions, housing finance companies and NBFCs) are eligible. Individuals, Trusts and Non-Profit Organisations are not eligble to raise ECB.

ECB can be raised only for investment(such as import of capital goods, new projects, modernization/expansion of existing production units) in real sector-industrial sector including small and medium enterprises and infrastructure sector- in India. Infrastructure sector is defined as power, telecommunication, railways, roads including bridges, ports, industrial parks and urban infrastructure projects.