Outbound M&A Structuring & RBI ODI Scrutiny 2026
Key Questions
Why is the RBI increasing scrutiny on overseas investments by Indian companies?
The RBI is tightening oversight amid a surge in outflows from $14.5 billion to $27 billion between FY24 and FY26. This includes heightened attention to equity, loans, and guarantees routed through Singapore and the US under the 2022 Overseas Investment Regulations.
What limits apply to overseas investments under the current ODI regulations?
Under the ODI regulations, a company or limited liability partnership can remit up to 4 times its net worth abroad annually. These rules are part of the FEMA (Overseas Investment) Regulations, 2022, and related Directions issued by the RBI.
How might the RBI's scrutiny affect structuring for companies like Reliance and Tata?
The increased focus impacts outbound M&A structuring and cross-border compliance for major Indian groups. Particular attention is given to routes involving equity, loans, and guarantees via Singapore and US jurisdictions under the 2022 OI Regulations.
RBI tightens scrutiny of overseas investments amid $27B outflows FY24-26; $1B threshold and 4x net worth cap under 2022 OI Regulations. Heightened review of equity/loans/guarantees via Singapore/US routes impacting Reliance/Tata structures.