Your Company proposes to enter into Joint Venture outside India and the Management of the Company wants to know from you various methods/modes available for funding the joint venture.

Investment (or financial commitment) in an overseas Joint venture (JV) / Wholly Owned Subsidiary (WOS) may be funded out of one or more of the following sources: (i) drawal of foreign exchange from an AD bank in India; (ii) capitalization of exports; (iii) swap of shares; (iv) proceeds of External Commercial Borrowings (ECBs) / Foreign Currency Convertible Bonds (FCCBs); (v) 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 guidelines issued there under from time to time by the Government of India; (vi) balances held in EEFC account of the Indian Party and (vii) proceeds of foreign currency funds raised through ADR / GDR issues. In respect of (vi) and (vii) above, the limit of financial commitment vis-à-vis the net worth will not apply. However, all investments (or financial commitment) made in the financial sector will be subject to compliance with Regulation 7 of the Master Direction - Direct investment by resident in Joint venture (JV) / Wholly Owned Subsidiary (WOS) abroad irrespective of the method of funding.