Amendments to Foreign Exchange Management (Overseas Investment) Directions, 2022
PUBLISHED ON: 15-06-2024
The Reserve Bank of India has issued a circular dated June 7, 2024 (available here), amending the Foreign Exchange Management (Overseas Investment) Directions, 2022 (“ODI Directions”), and an overview of the same is set out below:
- The erstwhile definition of overseas portfolio investment (“OPI”) under the ODI Directions, limited investments, including sponsor contributions, to ‘units’ of any
investment fund overseas. This circular now expands the scope of OPI, including sponsor contributions, to include ‘units or any other instrument (by whatever name called) issued by an investment fund overseas.’ - Accordingly, a person resident in India, being an Indian entity or a resident individual, can now make investments, including sponsor contributions, in units or any other instrument (by whatever name called) issued by an investment fund or vehicle set up in an International Financial Services Centre, as OPI.
- An explanation has been provided for the term ‘investment fund overseas, duly regulated’ to also include funds, whose activities are regulated by the financial sector regulator of host country or jurisdiction, through a fund manager.
