Investment Restrictions

Foreign investment in any form is prohibited in a company or a partnership firm or a proprietary concern or any entity, whether incorporated or not, which is engaged or proposes to engage in the following activities or organizations:

• chit fund (except that an NRI can invest on a non-repatriation basis subject to conditions);
• Nidhi company;
• agricultural or plantation activities;
• real estate business or construction of farm houses (“real estate business” means dealing in land and immovable property with a view to earning profit or earning income therefrom but the definition does not include development of townships, construction of residential or commercial premises, roads or bridges, educational institutions, recreational facilities, city and regional
• level infrastructure and townships);
• trading in transferable development rights;
• lottery business including government or private lotteries, or online lotteries;
• gambling and betting including casinos. Foreign technology collaboration in any form, including licensing for franchise, trademark, brand name, or management contract, is prohibited for the lottery business and gambling and betting activities;
• manufacturing of cigars, cheroots, cigarillos and cigarettes, of tobacco or of tobacco substitutes;
• activities or sectors not open to private sector investment, e.g. (i) nuclear energy and (ii) railway operations (other than permitted activities).

Partnership firms and proprietorship concerns having investments as provided for in the FEMA Regulations are not allowed to engage in the print media sector.

For other sectors, there are two approval routes for foreign investment in India:

• the automatic route under delegated powers exercised by the central bank, whereby prior approval is not required; or
• approval by the government through the FIPB.

There are no specific local participation requirements. There is no limit on foreign equity participation and up to 100% foreign equity is permitted without prior approval, subject to a few specified sectoral ceilings and prohibitions.