FEMA & FDI Ready Reckoner is the definitive reference for all aspects of India's foreign exchange management, cross-border investments, and remittance regulations. This book has been meticulously updated to incorporate all statutory changes, circulars, and regulatory notifications up to 20th May 2025, ensuring readers have access to the most current legal framework governing FEMA and FDI in India.
This Ready Reckoner is an indispensable resource for:
The Present Publication is the 23rd Edition | 2025, amended up to 20th May 2025. This book is authored by Taxmann's Editorial Board with the following noteworthy features:
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FEMA stands for Foreign Exchange Management Act, 1999. It governs all transactions involving foreign exchange and securities in India. FEMA replaced FERA and focuses on facilitating external trade and promoting orderly foreign exchange markets in India.
Applies to all branches, offices, and agencies outside India owned or controlled by a person resident in India.
Governs capital account and current account transactions.
Focuses on management (not control) of foreign exchange.
| Type | Definition | Examples | Requires RBI Approval? |
|---|---|---|---|
| Capital Account | Alters assets/liabilities of a person | Investment in shares, loans, property | In many cases, Yes |
| Current Account | Does not alter assets/liabilities | Travel, education, imports/exports | Mostly No (free unless restricted) |
FDI means investment through capital instruments by a person resident outside India in an unlisted Indian company or 10% or more of post-issue paid-up equity capital of a listed company.
| Route | Description |
|---|---|
| Automatic Route | No prior RBI or government approval required |
| Government Route | Prior approval from the concerned ministry/department needed |
| Sector | FDI Limit | Entry Route |
|---|---|---|
| Defence | 74% | Automatic |
| Telecom | 100% | 100% Automatic (up to 49%), Govt Route thereafter |
| Insurance | 74% | Automatic |
| E-commerce (B2B) | 100% | Automatic |
| E-commerce (B2C) | Not allowed | — |
???? Always refer to latest DPIIT Press Notes and RBI Master Directions for updated limits.
KYC Compliance – Through banks and AD Category-I Dealers
Reporting to RBI – Forms like FC-GPR, FC-TRS via FIRMS portal
Opening NRE/NRO/FCNR Accounts
Investment in Real Estate – Allowed with some restrictions for NRIs
| Form | Purpose |
|---|---|
| FC-GPR | For issue of shares to foreign investors |
| FC-TRS | Transfer of shares between resident and non-resident |
| LLP(I)/LLP(II) | Investment in LLPs |
| LRS | Liberalised Remittance Scheme reporting |
| FIRMS Portal | Online reporting to RBI |
Lottery business
Gambling and betting
Chit funds (for foreign investors)
Nidhi companies
Real estate business (not including construction)
| Subject | Details |
|---|---|
| FEMA | Governs foreign exchange in India |
| FDI Routes | Automatic & Government |
| Reporting Authority | RBI via AD Bank |
| FDI in LLP | Allowed under automatic route with conditions |
| NRI Repatriation | Allowed under FEMA-compliant transactions |
| Taxmann FEMA & FDI Ready Reckoner |
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