What are the necessary approvals and permissions required for foreign direct investment (FDI) in India from the USA/UK?

Foreign Direct Investment (FDI) in India requires adherence to specific regulatory frameworks and obtaining necessary approvals, particularly for investors from countries like the USA and UK.

• Automatic Route: Most sectors in India allow FDI under the automatic route, which does not require prior approval from the Government of India. Investors need only inform the Reserve Bank of India (RBI) about the investment within 30 days of its receipt or issue of shares​.
• Government Route: Certain sectors such as defence, telecommunications, pharmaceuticals and insurance require prior approval from the government​.
• Sectoral Caps and Restrictions: Different sectors have varying limits on foreign ownership. For instance, up to 100% FDI is permitted in sectors like infrastructure, retail and manufacturing under the automatic route, whereas sectors like defence and insurance have specific caps and may require government approval beyond certain thresholds​.
• Prohibited Sectors: Certain sectors are entirely closed to FDI. These include real estate businesses, lottery businesses, gambling and betting, atomic energy and railway operations, among others​​.

For detailed guidance and navigating the complexities of FDI in India, consulting a corporate lawyer in India is advisable. They can provide expert assistance in complying with sector-specific regulations and ensuring all legal and procedural requirements are met. A corporate lawyer in India can also help address any challenges that arise during the investment process, making them an invaluable asset for foreign investors.