The Reserve Bank of India (RBI) on June 15, 2026, issued amendment to the Master Direction – Foreign Investment in India.
The framework governing Foreign Investment in India is established under the Foreign Exchange Management Act, 1999 (FEMA), particularly Section 6(2A) and Section 47, read with the Foreign Exchange Management (Non-Debt Instruments) Rules, 2019 (NDI Rules). These rules replaced earlier regulations relating to securities and immovable property held by non-residents and are periodically updated through official gazette notifications to reflect changes in policy.
The NDI Rules authorize the Reserve Bank of India (RBI) to administer and interpret the provisions effectively. In this role, RBI issues directions, circulars, and clarifications as needed. Specific aspects such as mode of payment and reporting requirements for foreign investments are governed by the FEMA 395 regulations, ensuring proper monitoring and compliance.
To operationalize these rules, RBI issues directions to Authorised Persons under Section 11 of FEMA. This Master Direction provides comprehensive guidelines on how foreign exchange transactions related to foreign investment should be conducted by authorised entities with their clients, ensuring uniform implementation of the regulatory framework.
The Master Direction consolidates all relevant instructions, circulars, and notifications related to foreign investment in India, with a detailed reference list provided in Annex 12. It is issued under Sections 10(4) and 11(1) of FEMA read with the NDI Rules, and operates in addition to any other approvals or permissions required under applicable laws.
[Notification No. RBI/FED/2017-18/60 FED Master Direction No.11/2017-18]
