Exchange Control Manual


Undertaking Business Activity in India by Foreign Nationals
Date : Jun 01, 2005
11
 

NOTES:

A.

The term 'agent' includes any person or company (including its branch) buying goods with a view to selling them before any processing thereof. The term 'processing' has the meaning assigned to it in Explanation (c) under Section 28 of the Act.

         
   

B.

See paragraph 11A.12 for details regarding exemption granted to foreign nationals of Indian origin permanently resident in India.


Trading, Commercial and Industrial Activities of Foreign Companies/Foreign Nationals


11A.2

(i)

In terms of Section 29(1)(a) of FERA 1973, foreign companies and foreign nationals

 

(whether resident in India or not) are required to obtain permission of Reserve Bank to carry on

in India, any activity of a trading, commercial or industrial nature or to establish in India, a branch, office or other place of business for carrying on such activities. Application for permission should be made to the Central Office of Reserve Bank (Foreign Investment Division) by Foreign Companies in form FNC 2 and by foreign nationals in form FNC 3.


 

NOTES:

A.

Reserve Bank has by Notification No. FERA.22/74-RB dated 11th October 1974 issued under Section 29(1) of the Act granted general permission to shipping companies incorporated outside India for carrying on their normal commercial activities through agents provided such companies do not have a branch, office or other place of business in India.

         
   

B.

See paragraph 11A.12 for details regarding exemption granted to foreign nationals of Indian origin permanently resident in India.


(ii)

Foreign companies engaged in manufacturing or trading activities will be permitted to

open branches in India for the following purposes:


   

(a)

To represent the parent company/other foreign companies in various matters in India, e.g., acting as buying/selling agent in India,

       
   

(b)

To conduct research work in which the parent company is engaged provided the results of the research are made available to Indian companies,

       
   

(c)

To undertake export and import trading activities, and

       
   

(d)

To promote technical and/or financial collaborations between Indian companies and overseas companies.


Applications for opening of branches in India for the above purposes should be made to the Central Office of Reserve Bank (Foreign Investment Division) in form FNC 4.


 

(iii)

Foreign companies intending to set up a liaison office in India or to post a representative

in India for undertaking liaison activities on behalf of the parent company or foreign trading companies intending to set up liaison offices in India for promotion of exports from India should submit their applications in form FNC 5 to the Central Office of Reserve Bank (Foreign Investment Division). In approved cases, permission is granted initially for a period of 3 years subject, inter alia, to the condition that the expenses of the liaison/representative office are met exclusively out of inward remittances. Applications for renewal of permission should, however, be made to the concerned regional office of Reserve Bank under whose jurisdiction the office is situated.


 

(iv)

Applications for opening temporary project/site offices in India by foreign companies

proposing to engage in execution of specific projects/contracts undertaken with the approval of Government of India/Reserve Bank should be submitted in form FNC 5 to the concerned regional office of Reserve Bank under whose jurisdiction the office will be situated.

NOTE: Authorised dealers need not insist on documentary evidence if the amount of credit of refund/claim to QA 22 account does not exceed Rs.10,000.


 

(v)

In terms of Section 29(2)(a) of the Act, it was obligatory for foreign companies/foreign

nationals who were carrying on trading, commercial or industrial activities in India as on 1st January 1974 to apply to Reserve Bank for permission to continue their activities in India. Applications received from companies/persons were dealt with by Reserve Bank in terms of the Guidelines framed by Government of India for the purpose.


              (vi)     Authorised dealers may open QA.22 accounts in the names of Liaison Offices in India of foreign companies after verifying the relative approval granted by Reserve Bank under Section 29(1)(a) of Foreign Exchange Regulation Act, 1973. These accounts should be non-interest bearing and should be funded exclusively by way of inward remittances through normal banking channels. Authorised dealers may also allow credits in these accounts of refunds/claims received from various Government Departments/Municipal Authorities, Insurance Companies, refunds of security deposits on termination of lease of immovable property etc., provided the original payment relating to the transaction was made from the QA.22 account after verifying the original claim, refund order received from Government Department/Municipal Authorities/Insurance Company/Utility Company etc. In case of refund of security deposit from the landlords, the Lease Agreement and correspondence leading to the termination of lease agreement and refund of deposits may also be verified. Similarly, authorised dealers may also allow credit of sale proceeds of assets of Indian branches/offices of foreign companies to their respective QA.22 accounts provided these amounts are less than the book value of the assets as certified by a Chartered Accountant and the assets were acquired by payment from QA.22 account. Authorised dealers should keep copies of documentary evidence so verified on their records for inspection by their internal auditors/Reserve Bank.

Opening of Branches/Offices in India by Foreign Banks


11A.3

Opening of branches/offices in India by banks incorporated abroad (foreign banks)

 

requires permission of Reserve Bank under Section 22 of the Banking Regulation

Act, 1949. Applications for the purpose should be made to the Chief General Manager, Department of Banking Operations and Development, Reserve Bank of India, Central Office, Mumbai 400 001. Remittance of net profits/surplus by Indian branches of foreign banks to their Head Offices abroad, however, requires prior approval of the Exchange Control Department of Reserve Bank. (See paragraph 11C.2).


Acquisition of Undertakings in India


11A.4

Foreign companies and foreign nationals(whether resident in India or not) need permission of

 

Reserve Bank under Section 29(1)(b) of FERA 1973 for acquiring the whole or any part of

any undertaking in India, of any person or company carrying on any trade, commerce or industry. Applications for the purpose should be made to the Central Office of Reserve Bank (Foreign Investment Division) in form FNC 6.


 

NOTES:

A.

The association of a foreign company or a foreign national as a partner in an existing partnership firm in India is deemed to be an acquisition of the undertaking in India by the foreign company/foreign national requiring approval of Reserve Bank.

       
   

B.

See paragraph 11A.12 for details regarding exemption granted to foreign nationals of Indian origin permanently resident in India.


Purchase of Shares of Indian Companies


11A.5 (i) Reserve Bank vide Notification No.F.E.R.A.206/99-RB dated 31st July 1999 has granted general permission to Non-Residents to acquire shares from other Non-Residents (except from NRIs/PIOs and OCBs). NRIs/PIOs and OCBs are permitted to acquire shares from other NRIs/PIOs/OCBs. The rights of transferee/purchaser in respect of shares so acquired, shall be subject to same restrictions and conditions as were applicable to the transferor/seller of the shares. In terms of the above-mentioned Notification, permission has also been granted to a company incorporated in India and/or a depository defined in clause (2) of sub-section 1 of Section 2 of Depository Act, 1996 to enter in its register or books in which securities are registered or inscribed an address outside India of a holder of any securities consequent upon acquisition of such securities by non-residents as permitted above.

It is clarified that the notification No.F.E.R.A.206/99-RB dated 31st July 1999 does not permit transfer of shares from NRIs/PIOs/OCBs to foreign nationals/companies incorporated outside India. In such cases, the transferee may approach the Secretariat for Industrial Assistance (SIA), Ministry of Industry, Government of India, New Delhi for necessary permission. Subsequently an application in form FNC 7 along with SIA's permission may be made to Reserve Bank of India, Exchange Control Department, (Foreign Investment Division), Central Office, Mumbai for necessary permission under Foreign Exchange Regulation Act, 1973.

Note: See paragraph paragraph 11A.12 for details regarding exemption granted to foreign nationals of Indian origin permanently resident in India.

(ii) Reserve Bank vide its Notification No.F.E.R.A.207/99-RB dated 31st July 1999, has granted general permission to a person resident outside India or a company incorporated outside India to acquire shares from the shareholders who had acquired such shares as signatories to the Memorandum and Articles of Association provided (i) the Indian company is permitted to become a 100% owned subsidiary and (ii) the total number of shares so acquired does not exceed 500 and (iii) the face value of the shares to be transferred is less than 0.1% (one tenth of one per cent) of the paid-up capital. The company whose shares are so released and/or a depository have also been granted general permission to enter an address outside India in their books in respect of such shares.

(iii) Shares held by foreign companies/foreign nationals as on 1.1.1974 were required to be declared to Reserve Bank. Licences were issued by Reserve Bank granting permission to hold such shares declared specifying the eligibility or otherwise of the holder for repatriation of the capital and income earned thereon (See paragraph 10A.2).

Agricultural/Plantation Activities, etc. of FERA Companies


11A.6

In terms of Section 29(1A) of FERA 1973, FERA companies are required to obtain

 

general or special permission of Reserve Bank for carrying on in India any activity

relating to agriculture or plantation or to acquire the whole or any part of any undertaking in India, of person or company carrying on any activity relating to agriculture or plantation or purchase of the shares in such a company. Applications for the purpose should be made in form FNC 2 to the Central Office of Reserve Bank (Foreign Investment Division).


Practising Profession or carrying on an Occupation, Trade or Business in India by Foreign Nationals


11A.7

Under Section 30 of FERA 1973, a foreign national wishing to practise a profession

 

or carry on an occupation,trade or business in India should obtain prior permission of

Reserve Bank if he desires to seek facilities for remittance outside India of his earnings in India by reason of such profession, occupation, trade or business. Applications for obtaining permission of Reserve Bank should be submitted in form EFN to the Office of Reserve Bank under whose jurisdiction the applicant resides.


Transfer/Sale of Shares/Bonds/Debentures of Indian companies


11A.8

In terms of Section 19(5) of FERA 1973, transfer of shares/bonds/debentures of a

 

company registered in India by foreign companies/foreign nationals to residents is

required to be confirmed by Reserve Bank on an application made to it by the transferor or transferee. Applications for the purpose should be made by foreign companies/non-resident foreign nationals in form TS 1 and by resident foreign nationals in form TS 2 (Also see paragraphs 10B.8 and 10B.9). Foreign nationals of Indian origin resident outside India have been granted general exemption from the above provisions in respect of transfer of shares/bonds/debentures held by them in companies in India through recognised stock exchanges [See paragraph 10C.25(i)].


Immovable Property in India


11A.9

Under Section 31 of FERA 1973, foreign companies/foreign nationals are required to

 

obtain permission of Reserve Bank to acquire, hold, transfer or dispose of in any

manner (except by way of lease for a period not exceeding 5 years) any immovable property in India. Regulations governing such transactions in immovable properties in India are set out in Part E.


Reserve Bank Approval Pre-requisite for Remittances


11A.10

Reserve Bank may refuse permission for remittances outside India on account of profits,

dividends, etc. earned by foreign companies or on account of savings, family maintenance, etc. by foreign

nationals not permanently resident in India unless necessary permission under Sections 28, 29, 30 or 31 of FERA 1973, as appropriate, has been obtained by them.


Hospitality to Non-resident Visitors


11A.11

(i)

In terms of Notification No.FERA.91/91-RB dated 13th September 1991 issued under

 

Section 9(1) of FERA 1973, Reserve Bank has granted general permission to persons resident

in India to meet expenses in Indian rupees on account of boarding, lodging and services related thereto and/or for travel within India, of their non-resident guests visiting India in connection with business, activity or any other work of the host. The Notification also permits residents to receive such payments from other residents on behalf of persons resident outside India, but on a visit to India. It will, therefore, be in order for Indian firms/companies and other organisations to meet expenses on local hospitality on behalf of their non-resident guests coming to India for the purpose stated above without obtaining specific permission of Reserve Bank.


 

NOTE:

Indian firms/companies are sometimes required to pay for cost of to and fro passage fare of their non-resident directors, foreign technicians etc. coming to India for official business. There are no restrictions on payment of passage fares in India by residents on behalf of non-residents for travel to/from India on any Airline/Shipping company operating in/through India (see paragraph A.3 of Annexure III to Chapter 8).


 

(ii)

In cases where expenses for travel to India and back as also expenses for internal travel,

lodging, boarding etc., have been incurred by the non-resident company/person, authorised dealers may allow remittances towards reimbursement of such expenses to the non-resident company/person on verification of appropriate documentary evidence in support of the amount sought to be remitted and provided such expenses were required to be met by the Indian company in terms of the provisions of the relative contract/agreement.


Exemptions granted to Foreign Nationals of Indian origin permanently resident in India


11A.12

Foreign nationals of Indian origin permanently resident in India have been granted general

 

exemption from the requirements of Sections 28(1) and 29(1) of FERA 1973, vide Reserve

Bank Notification No.FERA 146/93-RB dated 26th April 1993. They do not, therefore, need any permission from Reserve Bank for accepting appointment as agents in India or for carrying on any trading, commercial or industrial activity in India or for the acquisition of an undertaking or purchase of shares referred to in paragraphs 11A.1, 11A.2(i), 11A.4 or 11A.5.


 

NOTE:

A foreign citizen of Indian origin is regarded as not permanently resident in India if he has been residing in India for employment of a specified duration (irrespective of the length thereof) or for a specific job or assignment the duration of which does not exceed three years.


Exemptions granted to Foreign Nationals Not Permanently Resident in India


11A.13

Foreign nationals who are on a visit to India on grounds of business, tourism,

 

etc. or who are resident but not permanently resident in India are exempted from

the restrictions imposed under FERA 1973, in respect of the following.


 

(a)

Maintenance of and operations on their foreign currency bank accounts outside India.


 

(b)

Making payments to or for the credit of persons resident outside India out of funds held in foreign currency accounts maintained abroad.


 

(c)

Holding in India of foreign currency in the form of travellers cheques, currency notes, bank notes and coins.


 

(d)

Acquisition, holding or disposal of foreign securities, provided such securities are acquired by them as their own property or are held by them for or on behalf of foreign citizens not permanently resident in India.


 

(e)

Making of settlement or gift of property outside India.


   

NOTE:

For the purpose of these exemptions, foreign citizens of Indian origin are treated as not permanently resident in India if they are residing in India for employment of a specified duration (irrespective of the length thereof ) or for a specific job or assignment the duration of which does not exceed three years (See Note to paragraph 11A.12).

PART B - MAINTENANCE OF BANK ACCOUNTS
(QA 22)

General


11B.1

(i)

Branches/offices in India of foreign firms companies or associations and foreign

   

nationals resident but not permanently resident in India are permitted to maintain and

operate bank accounts in India only with authorised dealers. The object behind subjecting the opening of and operations on such accounts to a certain degree of regulation is to bring to the notice of such account holders that it is illegal for them to provide any foreign exchange to other residents through their non-resident associates against reimbursement provided locally and to ensure that necessary approval of Reserve Bank has been obtained for their activities in India. While opening rupee accounts in the names of branches/offices in India of foreign companies and foreign nationals (resident in India), authorised dealers should obtain an undertaking in form QA 22 duly signed by all the persons (irrespective of nationality) who are authorised to operate on the accounts. Fresh declarations will be necessary in the event of any addition to the list of persons authorised to operate on the accounts. Form QA 22 should be carefully preserved by authorised dealers along with respective account opening forms.


 

NOTES :

A.

Form QA 22 need not be completed in respect of accounts to be opened in the names of Foreign Embassies, Consulates, Legations, Trade Representations and other Foreign Government establishments in India and the United Nations Organisation and its subsidiary/affiliate bodies in India or their officials in India. (This exemption is however not applicable to accounts maintained in the names of members of families of such officials and hence they may be required to furnish the undertaking in form QA 22).

       
   

B.

Form QA 22 need not be completed by foreign nationals of non-Indian origin permanently resident in India and foreign nationals of Indian origin (other than those who are residing in India for employment of specified duration irrespective of the length thereof or for a specific job or assignment, the duration of which does not exceed three years) and foreign-born wives of Indian nationals and of persons of Indian origin resident in India.


Status of QA 22 Accounts


11B.2

(i)

Accounts in the names of Indian branches/offices of foreign companies and

   

resident foreign nationals and in respect of which forms QA 22 have been

obtained are treated as resident accounts and operations thereon allowed freely provided credits to the account arise out of sources declared on the form. When the account holder ceases to be resident in India, the account may be converted into an Ordinary Non-resident Rupee (NRO) account.

 

While QA 22 accounts in the name of individuals can be maintained in any form such as current, savings and fixed deposits, the QA 22 accounts of foreign firms/companies can be maintained as current accounts only. There would, however, be no objection to funds in such accounts, held by firms/companies/associations, rendered surplus temporarily being placed in term deposits with a maturity not exceeding three months with the authorised dealer with whom the account is maintained.

 
 

(ii)

Authorised dealers may allow credits of refund of security deposit paid for securing

accommodation/reimbursement of vehicle insurance claims/loan repayments by the employees etc. to the QA 22 account of the Indian branches/offices of foreign companies and resident foreign nationals maintained with them provided authorised dealer is satisfied with reference to documentary evidence that the relevant original payment was made by debit to concerned QA 22 account. Authorised dealers should keep copies of documentary evidence so verified, on their records for inspection by their internal auditors/Reserve Bank.

 

NOTE: Authorised dealers need not insist on documentary evidence if the amount of credit of refund/claim to QA 22 account does not exceed Rs.10,000.

 

Authorised Dealers' Responsibilities regarding QA 22 Accounts

 

11B.3

(i)

Authorised dealers should exercise caution and report to Reserve Bank any

 

ransactions which may appear to represent reimbursement in rupees against foreign

exchange made available to any person in India other than an authorised dealer. Any other transactions where authorised dealer has reason to believe that they relate to an activity of the account holder requiring Reserve Bank's approval but not approved by Reserve Bank, should also be reported.


 

(ii)

Where foreign companies/foreign nationals have given an undertaking not to

seek remittance facilities out of any income earned in India or where a condition has been imposed to that effect by Reserve Bank while granting approval, (this may be ascertained by calling for perusal the letter of approval granted by Reserve Bank at the time of opening of the account), a prominent note of this fact should be taken in the ledger folio, etc. so that no remittance facilities are extended to such account holders.


Loans in India to Foreign Nationals/Liaison Offices of Foreign companies


11B.4

(i)

Loans and advances to foreign nationals not permanently resident in India

 

should not be granted if required for investment or for dealing in stocks and shares.

Loans for personal purposes such as purchase of household articles may be given up to a maximum of Rs.5,00,000/-(Rupees Five lakhs). This limit applies to total borrowings from all banks of the borrower and his dependents. Applications in form LOV 2 for loans in excess of this limit should be referred to Reserve Bank for prior approval.


 

(ii)

Loans/overdrafts should not be granted to liaison offices of foreign companies

since entire expenses of such offices are required to be met out of funds remitted from abroad.

 

Diplomatic Bond Stores Account

 

11B.5

In order to facilitate payment by foreign diplomatic personnel in India for their

 

purchases from bonded stocks held by firms and companies which have been granted

special facilities for import of stores into bond, arrangements have been made for maintenance of special bank accounts styled as 'Diplomatic Bond Store Accounts' by such diplomatic personnel. Authorised dealers may open such accounts denominated in rupees subject to the following conditions :


 

(a)

Credits to the accounts may be effected only out of proceeds of remittances received from abroad through banking channels in any of the permitted currencies or in rupees from non-resident bank account.

       
 

(b)

Before allowing any cheques to be drawn on a special account, authorised dealer concerned should apply to Reserve Bank and obtain a code number for the account. Applications for code numbers should state name and designation of the account holder and manner in which credits are proposed to be made to the account. There is no objection to a single account being utilized for more than one official. In such cases details in respect of all the beneficiaries should be advised.

       
 

(c)

All cheque leaves issued to account holders in respect of the special accounts should be superscribed 'Diplomatic Bond Store Account No. .....'

       
 

(d)

Debits to the accounts may be freely permitted for local disbursements but remittance of funds outside India will require prior approval of Reserve Bank.

       
 

(e)

Authorised dealers maintaining such special accounts should forward to Reserve Bank by the 10th of each month a statement in form DBS, listing (1) credits to the accounts during the previous month together with source of each credit and (2) payments made, stating numbers of the cheques and names of the payees.

PART C - REMITTANCE OF PROFITS/SURPLUS ETC. BY FOREIGN COMPANIES


Remittance of Profits by Foreign Companies (other than Banks)

       

11C.1

Applications for remittance of profits by the branches of the foreign companies should be accompanied by the following documents:


 

(a)

Certified true copy of audited Balance Sheet and Profit and Loss Account statement for the year to which the profit relates.

       
 

(b)

Certificate from the auditors covering the following:


   

(1)

manner of arriving at the remittable amount;

       
   

(2)

confirmation that the entire income of the branch office included in the accounts for the year had accrued from sources in India (In case any part of the income had accrued form sources outside India, the auditor's certificate should clearly indicate that this amount was repatriated to India immediately on realisation);

       
   

(3)

confirmation that the requirements of the Companies Act, 1956 have been complied with.


 

(c)

Certificate, citing RBI's approval number and date, from the auditors to the effect that the branch office has carried on business strictly in terms of the approval under Section 29(1)(a) granted by the Reserve Bank of India.

       
 

(d)

Certificate from the auditors that sufficient funds have been set aside to meet all Indian tax liabilities or that these liabilities have already been met.

       
 

(e)

Declaration from the applicant that the profit sought to be remitted is purely the profit earned in the normal course of business and does not include profit from any other source.


Authorised Dealers may scrutinize the above documents particularly with reference to -


   

(a)

source of income which should be out of activities approved by RBI and

       
   

(b)

calculations of the amount sought to be remitted with reference to the Profit and Loss account and the provision of tax.

       

If found in order, authorised dealers may allow the remittance.


Remittance of Profits by Foreign Banks Operating in India

 

11C.2

Indian branches of foreign banks operating in India may remit to their Head Offices

 

outside India net profit/surplus (net of taxes) arising out of their Indian business after

finalisation of the accounts for the respective year, in accordance with the provisions of the Banking Regulation Act, 1949 and directions issued by Reserve Bank in this regard. Full details of the remittances made should be advised to the Chief General Manager, Exchange Control Department (External Payments Division), Reserve Bank of India, Central Office, Mumbai 400 001 duly certified by their auditors imeditely after making the remittance.

 

Remittance of Surplus Passage/Freight Collections by Foreign Airline/Shipping Companies


11C.3

Regulations governing remittance of surplus freight and passage collections by

 

foreign airline/shipping companies operating in or through India are laid down in

Part B of Chapter 8.


Refund of Income-tax to Non-resident Firms/Companies


11C.4

Applications for remittances on account of refund of income-tax to foreign firms/companies

should be made to authorised dealers on form A2 supported by the following documents/particulars:


 

(a)

Original assessment order (together with certified copy) and copy of Income-tax Return for the corresponding assessment year.

       
 

(b)

Certificate from authorised dealer through whom the income-tax refund order has been encashed that the proceeds of the refund order are held by them in suspense account pending remittance abroad.

       
 

(c)

Source of funds from which tax was originally paid. If paid out of remittance from abroad, a bank certificate for the inward remittance; if tax was paid by deduction at source from dividend, interest on loans, royalty or other income which has already been remitted to the foreign firm/company, full details as under of the income on which tax was deducted should be furnished.


   

(1)

Nature of income i.e. dividend, interest, royalty, etc. amount and assessment year in which it accrued.

       
   

(2)

Name and address of Indian firm/company from which the income was derived.

       
   

(3)

The year/period to which the income related.

       
   

(4)

The date of remittance and other particulars of the amount originally remitted.


Authorised dealers may allow such remittances if they are satisfied that the tax amount of which the refund has been claimed was deducted from the amount remitted originally.

 

(See paragraph 11D.12 regarding remittance of income-tax refunds to individuals).

 

Remittance of Winding up Proceeds


11C.5

Applications for remittance of winding up proceeds abroad will be entertained by Reserve

 

Bank only after winding up has been completed and the actual net remittable surplus established.

Applications should be made on form A2 supported by following particulars/documents:


 

(a)

Number and date of Reserve Bank's approval for establishing the branch/office in India.

       
 

(b)

Number and date of Reserve Bank's approval for sale of immovable properties, if any, held by the branch/office.

       
 

(c)

Auditor's certificate containing the following:


   

(1)

manner in which remittable amount has been arrived at, duly supported by a statement of all assets and liabilities of the applicant, the manner of disposal of assets, name/s, and address/es of the purchaser/s, Reserve Bank's approval number/s and date/s under Section 31 of FERA 1973 for disposal of immovable properties etc.;

       
   

(2)

confirmation that all liabilities in India including arrears of gratuity, employee benefits, etc. in respect of the applicant have either been fully met or adequately provided for;

       
   

and


   

(3)

confirmation that no income accruing from sources outside India (including proceeds of exports) has remained unrepatriated to India.


 

(d)

No objection Certificate or Tax Clearance Certificate from Indian Income-tax Authorities for the remittance of net surplus.

     
 

(e)

Confirmation from applicants that no legal proceedings in Indian Courts or enquiries from Enforcement Directorate are pending against them and that after remittance of the net surplus, no further remittance facilities will be asked for.


PART D - REMITTANCE FACILITIES TO FOREIGN NATIONALS


General


11D.1

The regulations and procedures relating to remittance facilities available to foreign nationals

 

including those resident outside India are set out in this Part. Ordinarily, foreign nationals

who have taken up residence in India temporarily on account of their employment, profession or other activity with the intention of retiring eventually to their own or any other foreign country, will be considered as 'not permanently resident in India' and be eligible for various facilities explained in this Part, if the activity undertaken in India is in accordance with the general or special permission of Reserve Bank as required under FERA 1973. Foreign nationals permanently resident in India and persons of Indian origin other than those residing in India for employment of a specified duration (irrespective of the length thereof) or for a specific job or assignment the duration of which does not exceed three years, are treated on par with Indian nationals resident in India and will not be eligible for facilities for which foreign nationals not permanently resident in India are eligible, except as specifically provided in the Manual or where Reserve Bank's specific approval has been obtained.



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