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Transfer of participating interest in an oil field amounts to FDI

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Shivani Chugh

The Reserve Bank of India on 16 November 2011, with A.P (DIR Series) Circular 45, has specified that a transfer of participating interest in an oil field by a resident to a non-resident would be identified as foreign direct investment (“FDI“). Consequently, the Foreign Exchange Management (Transfer of issue of security by a person resident outside India) Regulations, 2000 would apply to such a transaction and the Indian entity would have to comply with the reporting requirements prescribed under the relevant RBI circulars. Necessary notifications must be made under to the authorised dealer bank within 60 days of the transaction

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