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Recent amendment to the NDI Reporting Regulations 

Writer's picture: Xerxes AntiaXerxes Antia

(Xerxes Antia & Disha Dubey)


The Reserve Bank of India (“RBI”) notified the Foreign Exchange Management (Mode of Payment and Reporting of Non-Debt Instruments) (Third Amendment) Regulations 2025 on January 14, 2025[1] (“NDI Reporting Amendment Regulations”). The NDI Reporting Amendment Regulations aims to streamline the mode of payment and remittances as provided under the Foreign Exchange Management (Mode of Payment and Reporting of Non-Debt Instruments) Regulations 2019[2] (“NDI Reporting Regulations”). Key changes introduced under the NDI Reporting Amendment Regulations are:  


  1. A person resident outside India may now make inward remittances for investments in: (i) equity instruments of Indian companies; (ii) limited liability partnerships and investment vehicles; or (iii) convertible notes (issued by Indian start-up companies), through banking channels or out of funds held in any repatriable foreign currency or Rupee account maintained as per the Foreign Exchange Management (Deposits) Regulations 2016 (“FEM Deposit Regulations”) instead of the earlier specified classes of bank accounts (non-resident (external) rupee account / foreign currency (non-resident) accounts) as provided under the NDI Reporting Regulations. This will also apply to any sale / disinvestment proceeds / repayments / refunds (in case the equity instruments of the Indian company are not issued within 60 days from date of receipt of consideration) to be remitted outside India through any of the repatriable foreign currency or Rupee account, instead of the earlier specified classes of bank accounts (as mentioned above).  


  2. It is now possible for a foreign portfolio investor to invest in Indian depository receipts through funds held in a foreign currency account and / or a Special Non-Resident Rupee account.  


  3. Banking channels have now been defined to include any rupee vostro accounts (including Special Rupee Vostro Accounts) permitted to be held by a person resident outside India as per the FEM Deposit Regulations. 


The NDI Reporting Amendment Regulations have now provided greater flexibility to foreign investors in terms of the types of bank accounts that can be used for remittances in India for foreign investments, while ensuring compliance with the foreign exchange control laws. 



 

Endnotes

  1. Notification No. FEMA 395(3)/2025-RB, Reserve Bank of India, Foreign Exchange Department. 

  2. Notification No. FEMA. 395/2019-RB, Reserve Bank of India, Foreign Exchange Department.

 

 

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