Foreign Exchange Regulation In India
India has come a long way in the two decades of liberalization. The country has removed most of the restrictions on the flow of foreign exchange. It is possible to convert the Indian rupee on a current account. Moreover the foreign exchange regulation in India now allows the capital accounts of non residents to be able to to fully convert rupee as well. All profits earned on foreign direct investments have been rendered repatriable and the investors can take profits to home.
According to the new, Foreign Exchange Management Act, the Reserve Bank of India, through its Foreign Exchange Department, regulates all the foreign exchange related activities in the country. The main focus of the regulation has been shifted from conservation of the foreign exchange reserves of the country to promotion of international trade by facilitating the flow of foreign exchange in and out of the country.
It is possible to take the money you earned after investing in India, back to your home country. Most of the sectors have policies that allow the investor to take his profits back though there are some sectors where the policies are still different. Similarly, the Non Resident Indians who invest under the non-repatriable schemes have to keep their profits in the country. Moreover, if any dividend is declared on the foreign capital, the authorized dealers can also send it back to your home country for you.
If you are a Non Resident, you do not need the approval of Reserve Bank of India to sell out your shares. It is possible to send the money you have made by selling your shares, to the country you live in, provided you pay the applicable income tax and get a No Objection Certificate from the Income Tax department of India. If you are selling out the shares you have by making a private arrangement, you might have to get permission from the Reserve Bank. The Reserve Bank has positioned its regional officers for this purpose, all over the country. Moreover, you have to sell the shares at prices which are set according to the notifications issued under the clauses of Foreign Exchange Management Act. If you are a non resident, it has become way easier for you to acquire immovable property in the country as well. If the Reserve bank has granted the permission to set up a branch of your business in the country then you also have an implicit permission to purchase any property in the country for the same purpose. All you have to do is fill up a form in a period not more than ninety days after you have acquired the said property. Foreign exchange regulation in India has been liberalized to such an extent that the country has become one of the best options to invest your money.
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