To,

All Banks Authorised to Deal in Foreign Exchange

Direct investments by residents in Joint Venture (JV) and Wholly Owned Subsidiary (WOS) abroad are being allowed, in terms of clause (a) of sub-section (3) of section 6 of the Foreign Exchange Management Act 1999, (42 of 1999) read with Notification No. GSR 757 (E) dated November 19, 2004 and FEMA Notification 120/RB-2004 dated July 7, 2004 as amended from time to time.

2. This Master Circular consolidates the existing instructions on the subject of "Direct Investment by Residents in Joint Venture (JV) / Wholly Owned Subsidiary (WOS) abroad' at one place. The list of underlying circulars/notifications is furnished in Appendix.

3. This Master Circular is issued with a sunset clause of one year. This circular will stand withdrawn on July 01, 2008 and be replaced by an updated Master Circular on the subject.

Yours faithfully,