The liberalised policy provides for the following routes :

 

 Automatic Route :  Indian corporates have been allowed to invest in entities abroad up to 300% of their net worth in a year as on the date of the last audited balance sheet, without prior approval of Reserve Bank or Government of India.  Besides, the Partnership firms registered with the Indian Partnership Act 1932 can make overseas investment not exceeding 200% of their net worth as on the date of the last audited balance sheet. [Master Circular issued by RBI dated 2^nd July 2007 ] 

 This ceiling will not be applicable where the investment is made out of balance held in Exchange Earner’s Foreign Currency (EEFC) account of the Indian party or out of funds raised through ADRs/GDRs. [Master Circular issued by RBI dated 2^nd July 2007 ]  

 (ii)     ADR/GDR Automatic Route :  In terms of this scheme , Indian companies can freely utilise up to 100% of ADR/GDR proceeds for overseas investments without  any limit under the automatic route subject to post facto report to the Reserve Bank   (Refer RBI Notification No. FEMA.40/2002-RB   dated March 2, 2001 in partial modification of notification No. FEMA 19/2000-RB dated 3^rd May 2000 on RBI website www.rbi.org.in).
 

(iii)  ADR/GDR automatic stock/ swap route : Under this route Indian companies can automatically swap their fresh issue of ADRs/ GDRs for overseas acquisitions in the same core activity subject to post facto report to RBI. (Refer RBI Notification No. FEMA 19/2000-RB dated 3^rd May 2000 as amended by Notification No. FEMA 40/2001-RB dated March 2, 2001 ).     

 

(iv)        Normal Route :   Proposals not covered under the above automatic routes are considered by the Special Committee on Overseas investments headed by the Deputy Governor, RBI with member representatives from Ministries of Finance, Commerce, External Affairs and the Reserve Bank. RBI is the secretariat for this Committee.   The application for direct investment in joint venture/ wholly owned subsidiary outside India or by way of exchange of shares of a foreign company, shall be made in form ODI or in form ODB respectively, to RBI, Exchange Control Department., Central Office, Mumbai – 400 001.