Investment in an overseas JV / WOS may be funded out of one or more of the following sources:
- drawal of foreign exchange from an AD bank in India;
- capitalisation of exports;
- swap of shares (valuation as mentioned in para B.1 (e) above);
- proceeds of External Commercial Borrowings (ECBs) / Foreign Currency Convertible Bonds (FCCBs);
- 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 thereunder from time to time by the Government of India;
- balances held in EEFC account of the Indian party and
- 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 made in the financial sector will be subject to compliance with Regulation 7 of the Notification, irrespective of the method of funding.
(2) General permission has been granted to persons resident in India for purchase / acquisition of securities in the following manner:
(i) out of funds held in RFC account;
(ii) as bonus shares on existing holding of foreign currency shares; and
(iii) when not permanently resident in India, out of their foreign currency resources outside India
