MINISTER OF THE STATE IN THE MINISTRY OF C0MMERCE & INDUSTRY (SHRI JYOTIRADITYA M. SCINDIA)
(a) & (b): FDI policy allows for issue of shares:
(i) by conversion of External Commercial Borrowings (ECB)
(excluding those deemed as ECB) in convertible foreign currency, into equity shares/fully compulsorily and
mandatorily convertible preference shares and
(ii) against lump sum technical know-how fee and royalty.
Such issue of shares would be subject to conditions detailed in paragraph 3.4.6 of Circular 2 of 2010,issued
by the Department of Industrial Policy & Promotion. The Circular is available in the public domain, on the
website of the Department of Industrial Policy & Promotion (www.dipp.gov.in).
Other forms of conversion against non-cash consideration, including trade payables and import of capital
goods, are not allowed under FDI policy.
(c) & (d): The Department of Industrial Policy and Promotion has released a Discussion Paper onâIssue of
shares for considerations other than cashâ, calling for views/suggestions from the stakeholders/public.
The discussion paper and the comments received thereon are available in the public domain, on the website
of the Department of Industrial Policy & Promotion (www.dipp.gov.in). Government has not taken a final
view in the matter.