The Reserve Bank of India (RBI) has relaxed the opening process of branch or liaison offices for the foreign entities running their business in defence or telecom sector in India, provided they have already received clearance from the concerned ministry.
The initiative will ensure smother office opening process under FEMA Act as the India is progressing ahead towards the vision of promoting the ease of doing business mantra in the country.
RBI notified that the foreign entities require no prior clearance for opening of a branch office / liaison office / project office (PO) or any other place of business in India, if the principal business of the applicant falls in the defence, telecom, private security and information and broadcasting sector.
The only condition valid here is that the government approval or license/permission by the concerned ministry/regulator has to be granted, beforehand.
Earlier, a prior approval from the Central Bank 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.