FDI Filing with RBI
Form FC-GPR, FC-TRS, FLA Return, and FEMA Compliance

Foreign Direct Investment (FDI) in India is one of the most tightly regulated areas of corporate and financial law, governed simultaneously by the Foreign Exchange Management Act, 1999 (FEMA), the Foreign Exchange Management (Non-debt Instruments) Rules, 2019 (FEMA NDI Rules), the FDI Policy issued by the Department for Promotion of Industry and Internal Trade (DPIIT) at dpiit.gov.in, and the Reserve Bank of India (RBI) at rbi.org.in. When a foreign investor puts money into an Indian company — whether a startup, a private limited company, an LLP, or a public company — the Indian entity must comply with a cascade of reporting and documentation obligations: identifying the applicable investment route (Automatic or Government), verifying sectoral caps and conditionalities, ensuring the shares are issued at or above the FEMA-prescribed fair value, obtaining the Foreign Inward Remittance Certificate (FIRC) from the bank, and filing Form FC-GPR with the RBI within 30 days of allotting shares to the foreign investor. Missing any step in this sequence is a violation of FEMA, which requires compounding (regularisation) through the RBI.

N D Savla & Associates, Chartered Accountants based in Mumbai, provides complete FDI compliance services: route determination (Automatic vs Government), sectoral cap verification, share valuation advisory (fair value computation under internationally accepted pricing methodologies), Form FC-GPR filing for primary FDI inflows, Form FC-TRS filing for secondary share transfers between residents and non-residents, annual FLA (Foreign Liabilities and Assets) return filing, compounding applications for FEMA violations, and advisory on downstream investment reporting. All RBI filings are made through the FIRMS (Foreign Investment Reporting and Management System) portal at firms.rbi.org.in, which is the RBI’s one-stop digital platform for all FDI-related reporting. Our Company Secretary compliance practice — see our Company Secretary Services guide — integrates closely with FDI filing, since the share allotment (the trigger for FC-GPR) involves board resolutions, PAS-3 (return of allotment) filing with the MCA, and updates to the Register of Members.

This page covers the complete FDI filing framework for Indian companies receiving foreign investment: the two investment routes and how to determine the applicable one; Form FC-GPR (the primary FDI reporting form); Form FC-TRS (for secondary transfers); the FLA Annual Return (mandatory even in years with no new FDI); the FIRMS portal and how filings are made; FEMA valuation requirements; compounding for delayed filings; and a summary of the most common FDI compliance scenarios that businesses encounter. FDI law is dynamic — the DPIIT FDI Policy and FEMA NDI Rules are periodically amended; always verify the current position at the FIRMS portal at firms.rbi.org.in and the DPIIT FDI Policy at dpiit.gov.in before proceeding.

All FDI proposals in India fall into one of two routes:

Automatic Route

No prior approval from the RBI or the Government of India is required. The foreign investor can invest directly in the Indian entity, and the Indian company must simply report the investment to the RBI through the FIRMS portal within the prescribed timeline. The Automatic Route is available for most sectors in India, including technology, manufacturing, services, e-commerce (B2B), hospitality, education, and most others. Key characteristics:

• No government approval needed before the investment is made
• The Indian company reports the FDI to RBI through the FIRMS portal after receiving the funds and allotting shares
• Compliance is entirely post-facto (report after the event, not before)
• The vast majority of FDI into Indian startups and private companies comes under the Automatic Route

Government Route

Prior approval of the Government of India is required before the investment can be made. Government Route proposals are approved through the Foreign Investment Facilitation Portal (FIFP) at fifp.gov.in, managed by DPIIT. The relevant administrative ministry must recommend the proposal to DPIIT for approval. Government Route applies to sectors with specific sensitivities:

• Multi-brand retail trading: 51% cap, Government Route
• Defense manufacturing: beyond 74% (74% is Automatic), Government Route
• Telecom services: 100% (Automatic up to 49%; Government above 49% for certain operators)
• Banking — public sector: 20%, Government Route
• Print media and FM radio: limited FDI, Government Route
• Satellite operations: Government Route

Prohibited Sectors (No FDI Permitted)

• Lottery business, gambling and betting, casinos
• Chit funds
• Nidhi companies
• Real estate business or construction of farm houses (but not development of townships, which is permitted)
• Manufacturing of cigars, cheroots, cigarillos, and cigarettes of tobacco or tobacco substitutes
• Activities/sectors not open to private sector investment: atomic energy, railway operations

What Is Form FC-GPR?

Form FC-GPR (Foreign Currency — Gross Provisional Return) is the primary reporting form that every Indian company must file with the RBI when it issues equity shares, compulsorily convertible preference shares (CCPS), compulsorily convertible debentures (CCDs), or share warrants to a foreign investor. FC-GPR is filed AFTER the investment has been received and shares have been allotted — it is a post-facto compliance report, not a pre-approval.

FC-GPR Filing Deadline

Form FC-GPR must be filed within 30 days from the date of allotment of shares (or other instruments) to the foreign investor. The 30-day clock starts from the date of allotment, not from the date of receipt of funds. If the company receives the funds on 1 March and allots shares on 15 March, the FC-GPR must be filed by 14 April (30 days from 15 March).

Step-by-Step FC-GPR Filing Process

Form FC-TRS (Foreign Currency — Transfer of Shares) is the RBI reporting form for SECONDARY transfers of shares — i.e., an existing shareholder transferring shares to a new buyer, as opposed to the company issuing new shares. FC-TRS is filed when:

• A resident Indian shareholder transfers shares to a non-resident (NRI, FPI, or foreign company)
• A non-resident shareholder transfers shares to a resident Indian (exit from the company)
• A non-resident transfers shares to another non-resident (NR to NR transfer) — this also requires FC-TRS in some cases

FC-TRS Key Compliance Points

• Deadline: 60 days from the date of receipt of consideration (funds) for the transfer
• Pricing: The transfer price must comply with FEMA pricing guidelines: Non-resident BUYING from a resident: price must be at or above fair value; Non-resident SELLING to a resident: price must be at or below the price at which the NR originally bought (subject to fair value)
• Responsibility: Form FC-TRS is filed by the Indian company. Both the resident and non-resident parties must provide necessary documents
• Documents: Share transfer deed (Form SH-4), FIRC (if NR is buying), KYC of both parties, valuation certificate, Board/shareholder approval if required under Articles of Association or FEMA, SEBI approval if applicable

The Foreign Liabilities and Assets (FLA) Annual Return is an annual compliance requirement for every Indian company, LLP, or other entity that has received FDI (equity, CCPS, CCDs, or other instruments) from a foreign investor at any point and has outstanding foreign investment as on 31 March of the reporting year. The FLA is not triggered by new FDI in that year — even if no new foreign investment was received, the company must file the FLA return if it has any outstanding FDI balance on 31 March.

• Filing deadline: 15 July each year (for the financial year ended 31 March of the same year)
• Filing portal: FIRMS portal at
• firms.rbi.org.in — under the FLAIR (Foreign Liabilities and Assets Information Reporting) module
• Basis: Audited financial statements for the year (or unaudited provisional accounts if audit is not complete by 15 July, with revised FLA to be filed once audit is complete)
• What FLA captures: Equity capital held by non-residents; re-invested earnings (Indian company’s profits attributable to foreign equity holder); other capital; total stock of FDI; outward direct investment (ODI) made by the Indian company; external commercial borrowings (ECB) outstanding; foreign portfolio investment
• Who must file: Every Indian company / LLP with outstanding FDI or ODI. Companies with ONLY foreign portfolio investment (FPI) in their shares do not file FLA — that is covered by FPI reporting through the custodians

One of the most critical and most frequently violated aspects of FDI compliance is the FEMA pricing requirement. Every issuance or transfer of shares to or from a non-resident must comply with FEMA’s pricing guidelines:

• Non-resident BUYING (Inward FDI): Price paid by the NR must be at or above the fair value of the shares as per internationally accepted pricing methodology (for unlisted companies: typically DCF valuation)
• Non-resident SELLING (NR exiting to resident): Price received by the NR must be at or below the price at which the NR originally acquired the shares (and subject to fair value floor in some cases)
• For listed companies: SEBI pricing guidelines apply (volume-weighted average price or floor price based on SEBI ICDR regulations)
• Valuation must be done by a SEBI-registered Category I Merchant Banker or a Chartered Accountant using an internationally accepted pricing methodology. For unlisted companies, DCF is the most commonly used and RBI-accepted method
• The valuation report must be prepared at or around the time of the transaction (not backdated)

The Foreign Investment Reporting and Management System (FIRMS) is the RBI’s consolidated digital platform for all FDI-related reporting. Accessible at firms.rbi.org.in, FIRMS replaced the earlier system of email-based reporting through Authorised Dealer (AD) banks. All FC-GPR, FC-TRS, FLA, and other FDI reports are now filed directly on FIRMS:

• FIRMS login: The Indian entity registers on the FIRMS portal using its CIN (for companies) or LLPIN (for LLPs). The authorised signatory must have a valid DSC (Digital Signature Certificate)
• Single Master Form (SMF): FIRMS uses the SMF concept where all FDI-related reporting is captured in a single integrated form, reducing duplication across FC-GPR, FC-TRS, and other forms
• FLAIR module: Within FIRMS, the FLA Annual Return is filed through the FLAIR module, which generates a draft return based on data already reported in FC-GPR/FC-TRS filings
• Authorised Dealer bank: Even in the digital FIRMS system, an Authorised Dealer (AD) bank (the bank that received the inward remittance) is involved in the process and endorses or reviews certain filings
• Unique Identification Number (UIN): Each foreign investor is assigned a UIN through the FIRMS portal. This UIN tracks all investments by the same foreign entity across multiple Indian companies

Compounding is the mechanism under FEMA (Section 15 of FEMA, 1999 read with the Compounding Rules, 2017) by which an entity that has committed a contravention of FEMA can regularise the violation by making a compounding application to the RBI and paying a compounding fee. Key aspects of compounding:

• Voluntary compounding: The entity proactively approaches the RBI to compound the violation. Voluntary compounding is encouraged and typically attracts a lower compounding amount than cases identified during enforcement
• Compounding authority: Applications are made to the relevant RBI Regional Office (for violations up to specified amounts) or to the RBI Central Office in Mumbai (for larger violations)
• Common violations requiring compounding: Late FC-GPR filing (beyond 30 days); late FC-TRS filing; receiving FDI in a prohibited sector; pricing violation; wrong route; FDI in excess of sectoral cap; failure to file FLA return
• Compounding amount: Computed as a percentage of the amount of contravention (the FDI amount involved) multiplied by the delay period, subject to minimum and maximum amounts under the Compounding Rules
• Outcome: Once the compounding order is passed by the RBI and the compounding fee is paid, the violation is regularised and no further FEMA enforcement action is taken for that specific contravention

Scenario 1 — Startup Receiving Series A Funding from a US VC

A DPIIT-recognised startup in the technology sector receives USD 500,000 from a US-based Venture Capital fund under the Automatic Route (technology sector: 100% FDI under Automatic Route). Action required:

• Verify the sector is under Automatic Route and no cap applies
• Receive funds — obtain FIRC and KYC from the bank
• Get a DCF valuation certificate from a SEBI-registered Merchant Banker or CA
• Pass board resolution allotting CCPS (Compulsorily Convertible Preference Shares) to the VC at the agreed price (not below fair value)
• File Form PAS-3 with MCA within 30 days of allotment
• File Form FC-GPR on FIRMS portal within 30 days of allotment
• File FLA return by 15 July for that financial year

Scenario 2 — NRI Buying Shares from an Indian Founder (Secondary Transfer)

An NRI (Non-Resident Indian) buys shares from an Indian founder/resident shareholder of a private limited company at Rs. 500 per share. Action required:

• Verify the NRI’s status (NRI investing on non-repatriation basis vs repatriable basis — different FEMA rules apply)
• Get a valuation certificate confirming Rs. 500 per share is at or above fair value
• Execute Share Transfer Deed (Form SH-4)
• Obtain FIRC from the NRI’s inward remittance to the founder’s bank account
• File Form FC-TRS on FIRMS portal within 60 days of receipt of consideration
• Update Register of Members and file any MCA forms required (e.g., SH-7 if no MCA form needed for private company transfer; check Articles of Association for pre-emption rights compliance)

Scenario 3 — Foreign Company Acquiring Majority Stake in Indian Company

A Singapore-based company is acquiring 70% equity in an Indian private limited company in the manufacturing sector. Action required:

• Verify: Manufacturing sector is generally under Automatic Route at 100%. Confirm no specific sub-sector restriction applies
• Structure: Combination of primary subscription (new shares issued by Indian company to Singapore entity) + secondary purchase (existing shareholder selling to Singapore entity)
• Primary: FC-GPR for newly issued shares within 30 days
• Secondary: FC-TRS for transferred shares within 60 days
• Downstream investment check: If the Indian company has subsidiaries, the Singapore investment creates downstream FDI — must comply with downstream investment reporting
• Annual FLA return: Required every year going forward as long as the 70% foreign investment is outstanding

From FERA to FEMA — The Liberalisation Journey

Before 1999, foreign exchange in India was governed by the Foreign Exchange Regulation Act, 1973 (FERA), which was a highly restrictive legislation that treated foreign exchange transactions as inherently suspect and imposed criminal penalties for violations. FERA was a product of India’s socialist economic era when FDI was viewed with suspicion. The liberalisation of the Indian economy in 1991 (the New Industrial Policy) began relaxing FDI restrictions significantly, but the legal framework remained FERA-based. The Foreign Exchange Management Act, 1999 (FEMA) replaced FERA entirely from 1 June 2000, shifting the approach from criminal enforcement to civil compliance: FEMA violations are civil contraventions (compoundable), not criminal offences (with one exception: violations involving predicate offences under the Prevention of Money Laundering Act). This shift from FERA to FEMA dramatically changed India’s FDI landscape.

Consolidation of FDI Rules — FEMA NDI Rules, 2019

For the first two decades of FEMA, FDI rules were scattered across multiple FEMA regulations. In 2019, the Government of India consolidated all FDI-related provisions (equity, convertible instruments, LLP investments) into a single comprehensive notification: the Foreign Exchange Management (Non-debt Instruments) Rules, 2019. This consolidation significantly simplified the regulatory landscape, providing a single-point reference for FDI policy, sectoral caps, pricing guidelines, downstream investment rules, and reporting requirements. The FEMA NDI Rules are now the primary legal reference for all equity FDI transactions.

FIRMS Portal — The Digital Revolution in FDI Reporting

Until 2018, FDI reporting was done through Authorised Dealer banks via email or physical forms — an error-prone and slow process. The RBI launched the FIRMS portal in 2018 to create a single digital interface for all FDI reporting. The integration of the Single Master Form (SMF) within FIRMS in 2019–2020 further streamlined reporting by consolidating FC-GPR, FC-TRS, and other FDI forms into a single online workflow. As of 2024–25, all FDI reporting is fully digital through FIRMS, with real-time tracking of filing status and direct communication between RBI/AD banks and the filing entity through the portal.

FDI compliance requires precise co-ordination across three professional domains: company law (share allotment, PAS-3 filing, MCA forms — see our Company Secretary Services guide), tax (implications of FDI for the Indian company’s income tax, withholding tax, and transfer pricing), and FEMA (FIRMS portal filings, valuation compliance, compounding). N D Savla & Associates provides all three in an integrated service.