Complete Guide to FDI in India: Routes, Sector Caps & Reporting
Before investing in India, every foreign investor must understand the FDI framework — which route applies, how much foreign ownership is allowed in your sector, and the reporting that follows.
Two entry routes
- Automatic Route: no prior government approval needed. Most sectors — manufacturing, most services, IT — fall here, and this is how the majority of FDI enters.
- Government Route: prior approval from the relevant ministry is required for sensitive sectors (parts of defence, media, etc.).
Sector caps
Each sector has a maximum permitted foreign shareholding — 100%, 74%, 49% and so on. Caps are updated periodically, so confirm your sector's current limit and route before committing capital.
Pricing guidelines
Issuing or transferring shares to non-residents must comply with FEMA pricing rules — a minimum price on issue and a cap on transfers to non-residents — backed by a valuation report from a registered valuer.
Mandatory reporting
- FC-GPR: file within 30 days of allotting shares to a foreign investor
- FC-TRS: file within 60 days for resident–non-resident share transfers
- FLA return: file annually by 15 July
Ongoing obligations
Beyond entry, expect annual FLA filing, transfer-pricing documentation for related-party dealings, and correct reporting on any further capital infusion.
Penalties
FEMA contraventions can attract penalties up to three times the amount involved, plus continuing daily penalties — so timelines and valuations matter.
Statura manages your FDI structuring, valuations and RBI filings end-to-end.