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India in Focus: Pricing considerations for foreign direct investment in India

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Priya Shah

Associate

London

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21 December 2021

As we explored in the last India in Focus article, the legal framework governing foreign investments in India is derived from an interconnected bundle of legislation, regulations and policy documents which together are commonly referred to as the IndianExchange Control Regulations. These prescribe mandatory pricing guidelines for foreign investment in India.

In this article, we focus on the pricing guidelines applicable to foreign direct investment ( FDI) – the only investment route which does not require prior investor registration with the Securities and Exchange Board of India ( SEBI), the statutory authority responsible for regulating India’s capital and securities markets. However, investors should also note that separate pricing guidelines apply for foreign portfolio investment and foreign venture capital investment in India. The pricing guidelines are wide in scope and merit careful consideration when considering any inbound investment or investment exit in India.

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