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 from inexperience.
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, advertising, etc.
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 inefficiencies.