Foreign entities doing business in defence or telecom sector in India will henceforth not need to seek separate approval from Reserve Bank of India for opening branch or liaison offices, provided they have clearance from the concerned ministry. 

This will make office opening process simple under FEMA Act as the country is looking to go up the ladder in the ease of doing business. 

RBI said that foreign entities need no prior approval for opening of a branch office / liaison office / project office (PO) or any other place of business in India, where the principal business of the applicant falls in the defence, telecom, private security and information & broadcasting sector, "if government approval or license/permission by the concerned ministry/regulator has already been granted." 

Earlier, a prior approval from RBI was mandatory. 

"In the case of proposal for opening a PO relating to defence sector, no separate reference or approval of government shall be required if the said non-resident applicant has been awarded a contract by/entered into an agreement with the Ministry of Defence or Service advised that Headquarters or Defence Public Sector Undertakings," RBI said. 

Published On : 28-03-2019

Source : Economic Times