Automatic approval for foreign equity in software and almost all areas of electronics.
Automatic approval accorded for foreign technology agreements in all areas of electronics except aero-space and defence, subject to specified conditions.
100% foreign investment permitted in units set up exclusively for exports. Such units can be set up under any one of the following schemes; EHTPs, STPs, Free Trade Zones/EPZs, and 100% EOUs.

A foreign company can start operations in India by registration of its company under the Indian Companies Act 1956. Foreign equity in such Indian companies can be upto 100%. At the time of registration, it is necessary to have project details, local partner (if any), structure of the company, its management structure and shareholding pattern. Registration is a kind of formality and it takes about two weeks. It can forge strategic tie up with an Indian partner.
A joint venture entails the advantages of established contracts, financial support and distribution-marketing network of the Indian partner. Approval of foreign investments is through either automatic route or Government approval.

Government of India facilitates Foreign Direct Investment (FDI) and investment from Non-Resident Indians (NRIs) including Overseas Corporate Bodies (OCBs), predominantly owned by them to complement and supplement domestic investment. Foreign technology induction is encouraged both through FDI and through foreign technology collaboration agreement. Foreign Direct Investment and Foreign technology collaboration agreements can be approved either through the automatic route under powers delegated to the Reserve Bank of India (RBI) or otherwise by the Government.

FDI upto 100% is allowed under the automatic route from foreign/NRI investor without prior approval in most of the sectors including the services sector. FDI in sectors/activities under automatic route does not require any prior approval either by the Government or RBI. In pursuance of Government's commitment to further liberalise the FDI regime, all items/activities have been placed under the automatic route for FDI/NRI and OCB investment, except the following:

1. All proposals that require an Industrial Licence, which includes
2. the item requiring an Industrial Licence under the Industries (Development & Regulation) Act, 1951.
3. Foreign investment being more than 24% in the equity capital of units manufacturing items reserved for small scale industries; and
4. All items which require an industrial licence in terms of the locational policy notified by Government under the New Industrial Policy of 1991.
5. All proposals in which the foreign collaborator has a previous venture/tie up in India.
6. All proposals relating to acquisition of shares in an existing Indian company in favour of a foreign/NRI/OCB investor.
7. All proposals falling outside notified sectoral policy/caps or under sector in which FDI is not permitted and/or whenever any investor chooses to make an application to the FIPB and not to avail of the automatic route.

All proposals for investment in public sector unit, as also for EOU/EPZ/EHTP/STP units would qualify for automatic route subject to the above parameters. The modalities and procedures for automatic route would remain the same and RBI would continue to be the concerned agency for monitoring/reporting as per exiting procedure. FDI/NRI/OCB investment under the automatic route shall continue to be governed by the notified sectoral policy and equity caps.

All proposals for foreign investment requiring Government approval are considered by the Foreign Investment Promotion Board (FIPB). The FIPB also grants composite approvals involving foreign investment/foreign technical collaboration. For seeking the approval for FDI other than NRI investments and 100% Export Oriented Units (EOUs), applications in form FC-IL should be submitted to the Department of Economic Affairs (DEA), Ministry of Finance. Foreign investment proposals received in the DEA are generally placed before the Foreign Investment Promotion Board (FIPB) within 15 days of receipt. The decision of the Government in all cases is usually conveyed within 30 days.