A.P. (DIR Series) Circular No. 27
All Category - I Authorized
Madam / Sir
of Branch Office (BO) / Liaison Office (LO) / Project Office (PO) or any
other place of business in India by foreign entities
Attention of the Authorised
Dealer (AD - Category I) banks is invited to the Foreign Exchange
Management (Establishment in India of a Branch Office or a Liaison Office
or a Project Office or any Other Place of Business) Regulations, 2016,
notified by the Reserve Bank vide Notification
No. FEMA 22(R)/RB-2016 dated March 31, 2016, as amended from time to
time and the relevant directions issued thereunder.
2. The extant Regulations
regarding requirement of prior approval of the Reserve Bank of India, for
opening of a Branch Office (BO) / Liaison Office (LO) / Project Office (PO)
or any other place of business in India, where the principal business of
the applicant falls in the Defence, Telecom, Private Security and
Information and Broadcasting sector, have since been reviewed in
consultation with the Government of India and the amendments have been
notified by Government vide Notification No.
FEMA 22(R)(2)/2019-RB dated January 21, 2019.
3. Accordingly, it is advised
that for opening of a BO/LO/PO or any other place of business in India,
where the principal business of the applicant falls in the Defence,
Telecom, Private Security and Information and Broadcasting sector, no prior
approval of the Reserve Bank of India shall be required, if Government
approval or license/permission by the concerned Ministry/ Regulator has
already been granted. Further, in the case of proposal for opening a PO
relating to defence sector, no separate reference or approval of Government
of India shall be required if the said non-resident applicant has been
awarded a contract by/entered into an agreement with the Ministry of
Defence or Service Headquarters or Defence Public Sector Undertakings. It
is clarified that the term “permission” used in the Notification does not
include general permission, if any, available under Foreign Direct
Investment in the automatic route, in respect of the above four sectors.
4. All other provisions of the
BO/LO/PO policy shall remain unchanged. AD Category - I banks may bring the
contents of this circular to the notice of their constituents and
5. The Master Direction No. 10 dated January 1, 2016 is
being updated simultaneously to reflect the changes.
6. The directions contained in
this circular have been issued under Section 10(4) and 11(2) of the Foreign
Exchange Management Act, 1999 (42 of 1999) and are without prejudice to
permissions / approvals, if any, required under any other law.
(R. K. Moolchandani)
Chief General Manager