Reserve Bank of India issues clarification on overseas direct investment

The Reserve Bank of India (RBI) has, in a circular dated 25 April 2013, issued a clarification in respect of the Foreign Exchange Management (Transfer or Issue of any Foreign Security) Regulations 2004.

The ODI circular has stated that Indian parties that have set up structures abroad under the automatic route will not be permitted to offer financial products linked to the Indian rupee such as non-deliverable trades involving foreign currency, rupee exchange rates, stock indices, etc without prior approval from the RBI.