Capital Account Liberalisation

Proposals

* Indian companies can now invest up to US $50 million abroad on an annual basis through the automatic route without being subject to the three year profitability condition

* Companies which have issued ADRs/GDRs may henceforth make foreign investments up to 100% of these proceeds; up from the current ceiling of 50%

* Companies with proven track record desirous of investing larger amounts may now get a block allocation in advance from the RBI for overseas investments

* Indian companies that have issued ADRs/GDRs may acquire shares of foreign companies up to an amount of US $100 million or an amount equivalent to ten times their exports in a year, whichever is higher

* ADRs/GDRs will be provided two-way fungibility. Converted local shares may be re-converted to ADRs/GDRs while being subject to sectoral caps, wherever applicable

* Indian companies will now be permitted to list on foreign stock exchanges by sponsoring ADR/GDR issues against block shareholding. This facility will be offered to all categories of shareholders