Sale of foreign equity (LRS, FEMA)

I recently came across a rule requiring proceeds from sales of foreign shares to be repatriated to India within 90 days

Found it here (Check second last paragraph)
and here (search 90 days)

The RBI document is quite large and I cannot fully ascertain whether the rule applies to Individual investors as well.

I wanted to know if the 90 days repatriation rule is applicable to individual foreign portfolio investors and if so, would that not create a lot of currency conversion transactions reducing the effective return on investment.

@namitjain2890 Can you help or tag someone who might have experience with this ?

@nithin @siva Do you have any idea about this

No idea, maybe @somnath248

The RBI notifications you are referring to are quite old. Until a few years ago, the RBI used to be quite strict with capital/current account convertibility, and it was quite tough to repatriate money abroad, especially for investment purposes.

This has changed after the RBI amended the Liberalised Remittance Scheme (LRS) in 2015-16. Now, there’s no requirement for retail investors to repatriate funds from any investments back to India within any specific timeframe.

I’ve attached a screenshot from the LRS page saying this below. You can refer to the text of the entire RBI circular here.

As you’ll notice, the phrase used in the RBI circular is “income”, which includes capital gains, as well as income from interest, dividends etc.

The RBI has reiterated this in its FAQs on the LRS, specifically in the context of interests and dividends. The relevant text is in the screenshot below:

There are some restrictions around repatriation in case of investments made by Indian residents in JVs & subsidiaries abroad. However, those are geared towards institutional investments abroad, and are largely irrelevant for the retail segment.


@viraj_joshi14 Thanks for that detailed answer including sources.

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