RBI eases FEMA norms to spur investment from overseas

The Reserve Bank of India (RBI) has simplified Foreign Exchange Management (Transfer or Issue of Security by a Person Resident outside India) Regulations to make it easier for foreign investors to invest in the country.
It was done by putting all 93 amendments under one notification. The new regulation combines earlier two regulations on foreign investments. They are FEMA 20 (investment in Indian company or partnership or in a limited liability partnership) or FEMA 24 (investment in a partnership firm). It also introduces late submission fee that could allow investor to regularise any contravention due to non-reporting, by paying the fee.

Foreign Exchange Management Act (FEMA)

The Foreign Exchange Management Act (FEMA) was passed by Parliament in 1999 and so far was amended 93 times. It had replaced FERA (Foreign Exchange Regulations Act), 1973 which had become incompatible after economic reforms and pro-liberalization policies of Government.
It aims at facilitating external trade and payments and for promoting the orderly development and maintenance of foreign exchange market in India.  It makes offenses related to foreign exchange civil offenses. It enables new foreign exchange management regime consistent with emerging framework of World Trade Organisation (WTO).


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