Cadrehub
Foreign investment approvals and FDI advisory

Foreign Investment Approvals

Helping global Investors enter India smoothly

India is one of the fastest-growing investment destinations in the world. However, foreign investment is regulated under FEMA and sectoral FDI policies. At CadreHub, we help businesses and investors understand the approval process, avoid delays, and stay fully compliant from day one.

Understanding the Two Routes of Foreign Investment

Foreign Direct Investment (FDI) in India is allowed through two main routes.

1. Automatic Route

This is the simplest path. No prior government approval is required. Investors can directly invest in the Indian company and complete post-investment compliances with RBI.

Most startups and modern businesses fall under this route, including:

  • IT and software companies
  • Manufacturing businesses
  • Fintech and consulting firms
  • Renewable energy companies
  • E-commerce marketplace models
  • Greenfield pharmaceutical companies
  • Regulated NBFC activities

Even though approval is not required, RBI reporting and FEMA compliance are mandatory after the investment is received.

2. Government Route

Certain sectors are considered sensitive and require prior approval from the Government of India before the investment can be accepted.

Common sectors under approval route include:

  • Defense and aerospace
  • Telecom
  • Insurance and banking
  • Media and broadcasting
  • Multi-brand retail
  • Civil aviation
  • Satellite and space activities

The approval is processed through the Foreign Investment Facilitation Portal (FIFP) and reviewed by the relevant ministry and security agencies.

Special Rule for Investments from Border Countries

As per current regulations, any investment coming from countries sharing land borders with India requires government approval, regardless of the sector.

This includes investments from:

China, Hong Kong, Pakistan, Nepal, Bangladesh, Myanmar, Bhutan and Afghanistan.

This rule is particularly important for startups raising global funding.

How the Approval Process Works

We manage the complete approval journey for you:

  • Preparing and filing the application on the FIFP portal
  • Coordinating with the relevant ministry and regulators
  • Handling security clearances, where required
  • Supporting until approval is granted

Typical approval timeline: 8–12 weeks

Post-Investment RBI Compliance

After receiving foreign funds, companies must complete mandatory RBI filings within strict timelines. These include:

  • Reporting receipt of funds
  • Share allotment within 60 days
  • Filing FC-GPR form with RBI
  • Annual FLA return filing

Our team ensures all filings are completed accurately and on time.

Investment Instruments Allowed

Foreign investment can be received in the form of:

  • Equity shares
  • Compulsorily Convertible Preference Shares (CCPS)
  • Compulsorily Convertible Debentures (CCD)

We assist with structuring the investment in compliance with FEMA regulations.

Valuation & Pricing Compliance

Issuing shares to foreign investors requires proper valuation under RBI guidelines.

We support with:

  • DCF valuation reports
  • Pricing compliance
  • Share transfer regulations

This step is critical to avoid future FEMA penalties.

End-to-End FDI Support by CadreHub

We provide complete assistance at every stage:

  • Entry strategy and eligibility check
  • Structuring foreign investments
  • Government approval support
  • FEMA and RBI compliance
  • Valuation and documentation
  • Ongoing advisory for foreign-owned companies

Planning to raise foreign funding or invest in India?

CadreHub helps you navigate the regulatory landscape with clarity, speed, and confidence.

Book a Free Consultation