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The Reserve Bank of India (RBI) has issued directions under Notification No. RBI/2015 – 16/377, A.P. (DIR Series) Circular No. 63 (RBI Circular), to all Category – 1 Authorised Dealer banks, with a view of rationalising the various regimes for foreign investment and for permitting such foreign investment into units of Real Estate Investment Trusts (REITs) and Infrastructure Investment Trusts (InvITs) in India. The RBI Circular permits persons resident outside India including registered Foreign Portfolio Investors (FPIs) and Non – Resident Indian (NRI) to invest in such units, provided the payment is through normal banking channels.
It has also been clarified under the RBI Circular that foreign investment through such REITs and InvITs shall be regarded as downstream investment if either the sponsor or manager or investment manager is not owned and controlled in India. Such downstream investment shall have to conform to sectoral caps and other conditions as stated under the Foreign Direct Investment (FDI) Policy.
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