In an effort to impart more flexibility in overseas investment, Indian companies have been permitted to invest in excess of 400 per cent of their networth in energy and natural resources sectors, such as oil, gas, coal and mineral ores.
Investment in excess of 400 per cent of the networth will, however, need prior approval, the central bank said in a statement on Tuesday. The overseas investment up to 400 per cent of networth is under the automatic route. According to earlier norms, the overseas investment for companies was capped at 400 per cent of their networth.
ONGC [Get Quote] Videsh and Oil India will be allowed to invest in overseas unincorporated entities in the oil sector without any limits under the automatic route. However, such projects will need the government's prior approval.
Now, under the new regime, companies will have to approach RBI for capitalising export proceeds only when exports remain outstanding beyond the period of realisation.
Earlier, companies making direct investment through the capitalisation route overseas had to seek RBI's prior approval when the exports remained unrealised more than six months.