FC-TRS stands for (Form Foreign Currency-Transfer of Shares) Form. This form is filed in case of transfer of shares or convertible debentures of an Indian Corporation from a resident to a Non-Resident/Non-Resident Indian and vice versa by means of sale. The Indian corporation must report the transactions to the AD Category – I bank in the form FC-TRS within 60 days from the date of receipt of the amount of consideration.

There are two ways by which a foreign investor can invest in India– the automatic route and the government route.

  • Automatic Route: Under this route, a prior approval from the government of India and its concerned ministries is not required. The RBI can be informed after the investment has taken place.
  • Government Route: Under this route of FDI approval, a prior permission by the government and its concerned ministries is mandatory.
  • However foreign investors are not allowed to invest in the following sectors as they are Prohibited sectors.




The Reserve Bank of India vide AP (DIR Series) Circular no 30 dated June 07, 2018 introduced an interface, namely Entity Master Form (EMF), to the Indian entities, to input the details of the total foreign investment received by them as on the date of creation of the EMF account.

Pursuant to the introduction of the aforesaid FDI reporting norms, the Indian entities are now required to create an EMF account and SMF account on the Foreign Investment Reporting and Management System (FIRMS) portal by following the procedure mentioned therein.

The creation of EMF account is the first step and it is an entity specific account i.e. the Indian entity can create only one EMF account on FIRMS portal. After the EMF account is created, the Indian entity can proceed to create the SMF account on FIRMS Portal, which is an Authorized Dealer Bank (AD Bank) specific account.



  • Foreign Direct Investment must be compliant with the sectoral caps mentioned in the latest FDI policy. The sectors and their cap under the automatic route are given below:


Documents Required for automatic route:

  • Consent Letter through the seller and buyer or their duly appointed agent and in the latter case the Power of Attorney Document.
  • Disclosure of the shareholding pattern of the investee corporation after the acquisition of shares by an individual resident outside India.
  • A Certificate from a Chartered accountant representing the fair value of shares.
  • Broker’s note, relating to a sale, which has been made on the Stock Exchange and/or share transfer form & relevant extract of the share purchase agreement.
  • Buyer’s declaration that he is entitled under FDI policy and the existing sectoral limits as well as Pricing Guidelines which needs to be complied with.
  • Declaration as per RBI FIRMS User manual.



The APPROVAL PROCESS for foreign direct investments in India are based on a standards and plan developed by DIPP. Submission of proposal and uploading document on Foreign Investment Facilitation Portal is required for the same. Following are the sectors and their limits under the Approval Route.


  • For some sectors like Defence manufacturing, Banking (Private Sector) etc., investment under the automatic route is only allowed to a certain limit. For investments beyond the limits, one must undergo the approval route. Following are the limits beyond which the below mentioned sectors will have to take the approval of the Government.