The union cabinet chaired by Prime Minister approved that non-repatriable investments by NRIs, OCIs and PIOs will be treated as domestic investments here after. These investments will not be subjected to foreign direct investment caps. Cabinet’s move is aimed at attracting more investments from overseas and also greater inflow of foreign exchange remittance.

The cabinet has also approved an amendment to Schedule 4 of the Foreign Exchange Management Act (FEMA) Regulations, that NRI investments would be “deemed to be domestic investment made by residents”. Earlier under Schedule 4 of FEMA, NRI investments are made on non-repatriation basis though it has not been provided that these are domestic investments.

In the past one year, the government has taken a number of measures ranging from policy corrections to bold economic reforms. During the April-February period, FDI rose by 39% to $28.81 billion from $20.76 billion in the same year-ago period.

GK Questions

• What is the full form of FERA? Foreign Exchange Regulation Act.
• FERA was replaced by FEMA in 1999. True or False? TRUE