What do you mean by "Financial Commitment" and "Indian Party" under Overseas Direct Investment?

CS Executive · Economic, Business and Commercial Laws · PYQS · June 2023
What do you mean by "Financial Commitment" and "Indian Party" under Overseas Direct Investment?

Answer & Explanation:

"Financial Commitment" means the aggregate amount of investment made by a person resident in India by way of Overseas Direct Investment, debt other than Overseas Portfolio Investment in a foreign entity or entities in which the Overseas Direct Investment is made and shall include the non-fund-based facilities extended by such person to or on behalf of such foreign entity or entities; "Indian Party" means a company incorporated in India or a body created under an Act of Parliament or a partnership firm registered under the Indian Partnership Act, 1932, or a Limited Liability Partnership (LLP), registered under the Limited Liability Partnership Act, 2008, making investment in a Joint Venture or Wholly Owned Subsidiary abroad, and includes any other entity in India as may be notified by the Reserve Bank. When more than one such company, body or entity makes investment in the foreign JV / WOS, such combination will also form an "Indian Party".

Topics: Foreign Exchange Management Act (FEMA), 1999

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