The Foreign Exchange Management (Non-Debt Instruments) Rules, 2019 (NDI rules), notified by the central government on 17 October 2019, along with the Reserve Bank of India’s (RBI) Foreign Exchange Management (Debt Instrument) Regulations, 2019, and the Foreign Exchange Management (Mode of Payment and Reporting of Non-Debt Instruments) Regulations, 2019, will supersede the Foreign Exchange Management (Transfer of Issue of Security by a Person Resident outside India) Regulations, 2017 (TISPRO).
The Foreign Exchange Management (Acquisition and Transfer of Immovable Property in India) Regulations, 2018, have also been included in the NDI rules with no substantial changes. Under the new rules, the central government will have powers of regulating transactions not involving debt instruments, in consultation with the RBI, while the RBI can frame regulations for transactions involving debt instruments, in consultation with the central government. The central government has issued a notification setting out instruments that would be categorized as debt instruments and non-debt instruments.
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