FDI Sector Cap + FC-GPR + FLA Wizard

A first-pass route and compliance check for foreign investment into an Indian company.

Selected sector cap

100%

Automatic

Technology / Software / IT

SaaS, software products, IT services — 100% automatic. No prior approval.

Automatic route

FDI up to the sector cap permitted without prior approval from RBI or Central Government. Only post-facto reporting (FC-GPR) required within 30 days of allotment.

Government route

FDI requires prior approval from the competent authority (DPIIT/ministry) before investment. Sectors like defence, telecom >49%, media, multi-brand retail require government route approval.

CA review

Whether a SAFE note issued to a foreign investor constitutes FDI — SAFEs are likely neither debt nor equity; the NDI Rules permit only capital instruments. RBI has not issued guidance specifically on SAFEs. Most lawyers convert SAFEs to CCPS for Indian companies. Confirm current RBI/DPIIT position.

Statutory basis: FEMA 1999 + FEMA (Non-Debt Instruments) Rules 2019 (NDI Rules — superseded FEMA 20(R) in Oct 2019); RBI Master Direction on FDI in India (updated periodically); Companies Act 2013 (for share issuance); IRDAI / RBI / SEBI / MIB sector-specific caps per NDI Rules Schedule I + II

Common questions

FDI rules, statute-cited.

What is the automatic route vs the government route for FDI?+

Under Rule 5 read with Schedule I of the FEMA (Non-debt Instruments) Rules 2019, investment on the automatic route needs no prior approval; the government route requires prior approval from the relevant ministry. Most sectors are 100% automatic, but regulated sectors (insurance, defence, telecom, media) have caps and fall partly on the government route — check the current Schedule I entry for your sector. This wizard applies the cap relevant to your industry.

When must Form FC-GPR be filed?+

Form FC-GPR must be filed with the RBI through an AD bank within 30 days of the date of allotment of shares to a foreign investor — not 30 days from receipt of funds — under the FEMA (Non-debt Instruments) Rules 2019. Delayed reporting attracts a Late Submission Fee of ₹7,500 per return under the RBI’s 2022 LSF framework, in lieu of compounding for reporting delays. File on the RBI FIRMS portal with CA/CS certification.

What is the FLA return and when is it due?+

The Foreign Liabilities and Assets (FLA) annual return must be filed with the RBI by 15 July each year by every entity that has received FDI or made an overseas investment — even in a year with zero activity. Delayed filing attracts the ₹7,500 Late Submission Fee under the RBI’s 2022 LSF framework; persistent non-filing is a compoundable FEMA contravention. The return is filed on the RBI FIRMS portal.

Which sectors are prohibited for FDI?+

Schedule I of the FEMA (Non-debt Instruments) Rules 2019 prohibits FDI in lottery and gambling, chit funds, Nidhi companies, trading in transferable development rights, real estate business and construction of farmhouses, and manufacturing of cigars, cheroots, cigarillos and cigarettes. Investment in these sectors is not permitted on any route.

At what price can shares be issued to a foreign investor?+

The price of shares issued to a foreign investor must not be less than the fair market value under Rule 21 of the FEMA (Non-debt Instruments) Rules 2019 (pricing guidelines) — for listed companies, the market price rules apply; for unlisted companies, a valuation method consistent with internationally accepted practice is used. The former s.56(2)(viib) angel tax on above-FMV issues was omitted by the Finance (No. 2) Act 2024 w.e.f. AY 2025-26 and does not apply to shares issued on or after 1 April 2024.

When is FC-TRS required and how is it filed?+

FC-TRS is the reporting route when capital instruments are transferred between a resident and a non-resident in either direction. The form is filed through the AD Category-I bank where the consideration was received, within 60 days of the transfer or receipt/remittance of funds, whichever is earlier (FEMA (NDI) Rules 2019 Rule 4 read with FEMA 20(R)). The bank is the statutory reporting channel — a transfer cannot bypass it.

How does FEMA compounding work and where is the application filed?+

A contravention that attracts a penalty under Section 13 of FEMA 1999 can be regularised under Section 15 by applying to the RBI. The compounding application is submitted through the RBI's compounding application channel (PRAVAAH), with the compounded amount payable within 15 days of the compounding order. Submission mechanics are RBI-current — verify the portal at filing time.