FDI in India: Key Sectors, Routes & Compliance Requirements for Global Investors

India has positioned itself as a global investment hotspot with liberalised FDI norms, a large consumer market, and strong economic fundamentals. For non-resident investors and international companies looking to enter or expand in India, understanding the Foreign Direct Investment (FDI) framework is crucial for a legally compliant and financially rewarding business setup.

At Jain Prachi & Company, we provide complete guidance on choosing the right investment route, understanding sectoral caps, and complying with RBI and FEMA requirements — ensuring a seamless and compliant FDI experience.

What is FDI in India?

Foreign Direct Investment (FDI) refers to investment by non-resident entities in the capital of Indian companies. This can be done through:

• Equity shareholding
• Preference shares
• Convertible debentures
• Capital contribution in LLPs

FDI can flow into India either via the Automatic Route or the Government Route, depending on the sector and the investment cap.

Automatic vs. Government Route: What’s the Difference?

Automatic Route

• No prior approval from the Government of India required
• Only post-investment filings to the RBI
• Applies to most sectors like IT, manufacturing, fintech, e-commerce (B2B), etc.

 Government Route

• Requires prior approval from the concerned Ministry/Department
• Applicable in sensitive sectors such as defence, telecom, print media, and real estate

At Jain Prachi & Company, we assess your business activity and guide you through the appropriate route to ensure timely investment without regulatory delays.

Top Sectors Attracting FDI in India

Some of the most promising sectors for foreign investment in India include:

• Information Technology (IT) and Software Services
• E-Commerce (B2B Model)
• Manufacturing and Electronics
• Pharmaceuticals and Healthcare
• Renewable Energy and EVs
• Real Estate (under specific conditions)
• Fintech and NBFCs (with regulatory clearance)

We provide tailored insights into sector-specific limits, entry conditions, and government policy changes relevant to your investment.

Post-Investment Compliance: RBI & FEMA Requirements

Once foreign investment is made in an Indian entity, strict reporting and compliance must be followed under the Foreign Exchange Management Act (FEMA):

🔹 FC-GPR Filing (within 30 days)

Reporting the allotment of shares to non-residents to RBI via the FIRMS portal.

🔹 Annual FLA Return

Filed by all Indian companies having foreign investment to declare foreign liabilities and assets.

🔹 Board Resolutions, KYC, and Valuation Reports

All supporting documents for compliance and RBI submission must be professionally drafted.

At Jain Prachi & Company, we prepare and file all mandatory RBI reports, ensure accurate share valuation, and handle foreign shareholder KYC in compliance with Indian law.

FDI Cap Table: Sector-Wise Snapshot

We help you navigate these caps and align your investment structure accordingly.

How Jain Prachi & Company Can Help

• FDI Strategy & Structuring for Indian Entry
• RBI Approvals & Compliance Management
• FC-GPR, FLA & FEMA Advisory
• Company Incorporation & Shareholding Planning
• Complete Legal & Tax Compliance for Global Investors

Whether you are setting up a wholly-owned subsidiary or making strategic investments in an Indian firm, our experienced team ensures that your foreign capital flows smoothly, legally, and tax-efficiently.

Start Investing in India with Confidence

Looking to invest in India as a global business or non-resident investor? Get in touch with Jain Prachi & Company for FDI advisory, structuring, and compliance services.

Email:contactus@jainprachi.com
Website: https://jainprachi.com

We act as your dedicated compliance and legal partner from investment to expansion.

FAQs on FDI in India

Q: Can a foreign company invest 100% in an Indian company?
Yes, 100% FDI is permitted in many sectors under the automatic route.

Q: Do I need RBI approval for investing in India?
Only for sectors under the government route. Otherwise, post-investment filings are sufficient.

Q: What are the key post-investment filings?
FC-GPR within 30 days and the annual FLA return are mandatory.