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The government today said the recent curbs on outward investments by Indian companies will not impact the deals entered by them before August 14, the day Reserve Bank imposed restrictions on overseas investments.
"It is clarified that all the financial commitments made on or before August 14, 2013, in compliance with the earlier limit of 400% of the networth of the Indian Party under the automatic route will continue to be allowed.
"In other words, such investments shall not be subject to any unwinding or approval from the Reserve Bank," the Finance Ministry said in a statement.
The RBI has issued a notification in this regard.
On August 14, the central bank had reduced the overseas direct investment limit to 100% of a company's networth from 400% for all companies.
The restriction was not applicable on public sector firms like Oil India and ONGC Videsh.
However, later it said that there was no intention to restrict bona-fide and genuine overseas direct investment transactions by Indian companies.
Clarifying on remittance scheme, RBI said it can be used to acquire both listed and unlisted shares of an overseas company.
Resident individuals are permitted to make remittances for acquiring immovable property within the annual limit of $75,000 for already contracted cases before August 14, it said.
The RBI had put the restrictions on capital outflows in wake of falling value of rupee and high current account deficit.
Overseas investment by Indian companies had declined sharply to $1.94 billion in August, amid the RBI's curbs on such investments.
A month ago in July, the Indian firms had invested $3.24 billion in their various entities overseas.
