One of the biggest concerns for foreign
investors is how to get dollars out of India? Historically,
it is not a problem to repatriate investments and profits
from India. The Overseas Private Investment Corporation ("OPIC"),
a U.S. government backed insurer of foreign commercial
dealings, has never had to pay a claim due to India's
failure to provide foreign exchange. Dividends, capital
gains, royalties and fees can be repatriated easily with the
permission of the Reserve Bank of India. In a short,
specified list of consumer goods industries, dividend
balancing is required against export earnings.
In case of an exit decision, the overseas promoter can
repatriate his share after discharging tax and other
obligations. He can also disinvest his share either to his
Indian partner, to another company, or to the public. Even
during the so-called worst period no foreign company left
India without proper and due compensation. Problems do arise
when people and businesses try to go around the rules or
Rupee, the Indian currency, is convertible for the current
account. It means that:
Repatriation of foreign exchange at the existing market
rates has become easier.
Exporters can retain 25% of total receipts in foreign
currency accounts to meet requirements such as travel,
Foreign exchange will be available at market rates for all
imports except specified essential items.
Foreign exchange requirements for private travel, debt
servicing, dividend or royalty payments and other
remittances may also be obtained from banks or exchange
dealers at the current market rate.
The system has the advantages of completely bypassing
bureaucratic controls and freeing importers from delays and