State the permissible sources for funding Overseas Direct Investment.

CS Executive · Economic, Business and Commercial Laws · PYQS · December 2024
State the permissible sources for funding Overseas Direct Investment.

Answer & Explanation:

Funding for Overseas Direct Investment can be made by one or more of the following sources: Draw of foreign exchange from an AD bank in India Swap of shares (refers to the acquisition of the shares of an overseas IV/WOS by way of exchange of the sharers of the Indian party) Capitalization of export and other dues and entitlements Proceeds of External Commercial Borrowings/ Foreign Currency Convertible Bonds In exchange of ADRs/GDRs issued in accordance with the scheme for issue of Foreign Currency Convertible Bonds and Ordinary Shares (Through Depository Receipt Mechanism) Scheme, 1993 and the guideline issued by Government of India in the matter. Balance held in Exchange Earners Foreign Currency account of the Indian Party maintained with an Authorized Dealer Proceeds of foreign currency funds raised through ADR/GDR issues.

Topics: Economic Laws

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