Section 14(4) in Foreign Exchange Management (Transfer or Issue of Security by a Person Resident Outside India) Regulations, 2017
(4)Guidelines for calculating total foreign investment in Indian companies:(a)Any equity holding by a person resident outside India resulting from conversion of any debt instrument under any arrangement shall be reckoned for total foreign investment;(b)FCCBs and DRs having underlying of instruments in the nature of debt, shall not be reckoned for total foreign investment;(c)The methodology for calculating total foreign investment would apply at every stage of investment in Indian companies and thus in each and every Indian company;(d)For the purpose of downstream investment, the portfolio investment held as on March 31 of the previous financial year in the Indian company making the downstream investment shall be considered for computing its total foreign investment;(e)The indirect foreign investment received by a wholly owned subsidiary of an Indian company will be limited to the total foreign investment received by the company making the downstream investment;
