New Delhi, May 21: The Cabinet on Thursday decided to relax foreign direct investment (FDI) norms for NRIs, treating non-repatriable investments made by them on a par with domestic funding. As a result, NRI investments will now not be treated as FDI and will be exempted from sectoral restrictions, limits and approvals.
The Union Cabinet, chaired by Prime Minister, Narendra Modi, had approved amendments, including changes in definition of NRIs, to be incorporated in the FDI policy. The Cabinet has given its “approval to review of FDI policy on investments by Non-Resident Indians (NRIs), Persons of Indian Origin (PIOs) and Overseas Citizens of India (OCIs),” the statement said. Investments by NRIs under Schedule 4 of FEMA Regulations will now be deemed to be domestic investment at par with the investment made by residents, an official statement said.
As per the earlier FDI policy, definition of NRIs included PIOs, and OCIs were not specifically mentioned. “The decision that NRI includes OCI cardholders as well as PIO cardholders is meant to align the FDI policy with the stated policy of the Government to provide PIOs and OCIs parity with NRIs in respect of economic, financial and educational fields,” it said.
After the launch of ‘Make in India’, the government embarked upon a number of initiatives on ease of doing business. The Cabinet’s decision is expected to result in increased investments across sectors and greater inflow of foreign exchange remittance leading to economic growth of the country, it added.