Current Affairs · FEMA Non-Debt Instruments Amendment Regulations 2025
With reference to the Foreign Exchange Management (Mode of Payment and Reporting of Non-Debt Instruments) (Third Amendment) Regulations, 2025, which of the following accurately describes the prescribed payment and remittance mechanisms for Foreign Portfolio Investors (FPIs) and Limited Liability Partnerships (LLPs)?
- 1FPIs must execute their payments solely through share swap arrangements, while LLPs are permitted to use SNRR accounts but are restricted from remitting their disinvestment proceeds outside India.
- 2FPIs are permitted to make payments via foreign currency accounts or Special Non-Resident Rupee (SNRR) accounts, while capital contributions to LLPs must be remitted through banking channels or eligible accounts.✓
- 3Capital contributions to LLPs must be made exclusively via Special Non-Resident Rupee (SNRR) accounts, whereas FPIs are strictly prohibited from utilizing foreign currency accounts for their payments.
- 4FPIs are mandated to use inward remittance exclusively, while LLPs must credit their disinvestment proceeds strictly to Non-Resident External (NRE) accounts.
Correct answer
FPIs are permitted to make payments via foreign currency accounts or Special Non-Resident Rupee (SNRR) accounts, while capital contributions to LLPs must be remitted through banking channels or eligible accounts.
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