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October 2013

A. P. (DIR Series) Circular No. 41 dated 10th September, 2013

By Gaurang Gandhi, Chartered Accountant
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Overseas Direct Investment–Amendment
This circular has modified condition of clause (b) relating to obtaining prior permission under the Approval Route from the RBI for providing corporate guarantee by an Indian Party on behalf of second generation or subsequent level step down operating subsidiaries. The original and revised provisions are in the table:

Table regarding Overseas Direct Investment

 Original Provision

 Revised Provision

 (b) Further, it has also been decided that issue of corporate guarantee on behalf of second generation or subsequent level step down operating subsidiaries will be considered under the Approval Route, provided the Indian Party directly or indirectly holds 51% or more stake in the overseas subsidiary for which such guarantee is intended to be issued.

 (b) Further, it has also been decided that issue of corporate guarantee on behalf of second generation or subsequent level step down operating subsidiaries will be considered under the Approval Route, provided the Indian Party indirectly holds 51% or more stake in the overseas subsidiary for which such guarantee is intended to be issued.

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