Question 1

What is the difference between the automatic and government route for FDI?

Accepted Answer

Under the automatic route, foreign investment needs no prior approval — only post-facto RBI reporting. Under the government route, prior approval from the concerned administrative ministry is required. The applicable route and sectoral cap depend on the activity; some sectors (e.g. defence above a cap, multi-brand retail) are restricted or prohibited.

Question 2

What is Form FC-GPR and when must it be filed?

Accepted Answer

FC-GPR reports the issue of shares or other eligible instruments by an Indian company to a non-resident. It must be filed on the RBI's FIRMS portal within 30 days of allotment. Late filing attracts a Late Submission Fee, and uncorrected delays may require compounding.

Question 3

What is ODI and what reporting does it require?

Accepted Answer

Overseas Direct Investment is investment by an Indian entity/resident in a foreign entity. Under the 2022 OI rules, it is reported in Form FC (and OPI for portfolio investment), with an Annual Performance Report (APR) due each year and evidence of investment retained. Financial commitment limits and the no-round-tripping conditions apply.

Question 4

What is the FLA return?

Accepted Answer

The Foreign Liabilities and Assets annual return must be filed by 15 July each year by every Indian company or LLP that has received FDI or made ODI in any year. It is filed on the RBI's FLAIR portal and is separate from the transaction-level FC-GPR/FC-TRS filings.

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