Role of RBI
The Reserve Bank of India (RBI) has a major role in regulating foreign direct investment (FDI) in India. According to the Foreign Exchange Management Act (FEMA) of 1999, FDI in India must be made in accordance with the rules and regulations set by the RBI.
All FDI investments must adhere to the regulations set out by the Government of India, as well as additional rules defined by the RBI in order to safeguard the integrity of foreign currency funds. Before investing in India, foreign companies must comply with a few requirements. Firstly, the company must register with the Foreign Investment Promotion Board (FIPB) and obtain approval for the investment.