Summary: The draft FEMA (Foreign Investment) Rules, 2026, propose to replace the NDI Rules with a consolidated framework, introducing reworked thresholds, a broader pledge regime, relaxed gift norms, and recalibrated pricing requirements. This article attempts to analyse some of the key hits and misses, in comparison to the NDI Rules.
Continue Reading Draft Foreign Exchange Management (Foreign Investment) Rules, 2026: Hits and misses
Summary: The DPIIT has revised the Standard Operating Procedure governing the processing of FDI proposals requiring government approval, to align it with the recent changes introduced under Press Note 2 of 2026 and the NDI Amendment Rules, 2026. While the overall approval framework remains largely unchanged, the revised SOP introduces significant procedural changes, including a dedicated framework for investments from countries sharing land borders with India, enhanced disclosure and reporting requirements, revised timelines and other measures aimed at streamlining the FDI approval process.
Continue Reading What’s Changed, What’s Not: The 2026 FDI Approval DPIIT SOP
Summary: This blog examines the compounding framework under the Compounding Rules and Directions, as amended in April 2025, with a particular focus on non-reporting contraventions under FEMA. It argues that the RBI’s increasingly facilitative approach to compounding has made it the most commercially sensible route for entities seeking to regularise historical non-compliances under FEMA and India’s FDI policy.
Continue Reading Compounding of non-reporting contraventions under FEMA
Summary: The old question of whether RBI approval is required for payment of damages under FEMA has been recently re-looked at in two recent decisions of the Supreme Court arising from decisions of the Madras High Court and the Delhi High Court. We consider these cases as well as the jurisprudence leading up to them
The compounding mechanism under Section 15[1] of the Foreign Exchange Management Act, 1999 (“FEMA”), allows individuals and companies to voluntarily admit breach of FEMA provisions and pay a penalty to regularise their contraventions without undergoing lengthy enforcement actions. In continuation of our earlier analysis of the Foreign Exchange (Compounding Proceedings) Rules, 2024[2] (“Compounding Rules”), read with Master Directions on Compounding of Contravention under the FEMA[3] (“Compounding Directions”), notified last year, we now examine the latest amendments to the compounding mechanism under the Compounding Directions. The Reserve Bank of India (“RBI”), through A.P. (DIR Series) Circulars notified on April 22, 2025, and April 24, 2025[4] (“April Amendments”), respectively has further amended the Compounding Directions. These amendments were preceded by a press release dated April 11, 2025[5], where the RBI mandated all banks, financial companies, and other regulated entities to submit their regulatory authorisations/ licenses/ approvals exclusively through the PRAVAAH online portal on and from May 1, 2025, onwards.
Continue Reading Compounding Under FEMA: What Has Changed Post 2025 Amendments