Regulation 8B of Master Circular on Foreign Investment in India dated July 1, 2013 (RBI/2013-

14/15), issued by Reserve Bank of India (RBI) grants a general permission for
purchasing/acquiring shares from non-resident shareholder. It states as hereunder 8B.
Acquisition by way of transfer of existing shares by person resident outside India 8B.I: Foreign
investors can also invest in Indian companies by purchasing /acquiring existing shares from
Indian shareholders or from other non-resident shareholders. General permission has been
granted to non- residents / NRIs for acquisition of shares by way of transfer in the following
manner: a. Non Resident to Non-Resident (Sale/Gift): A person resident outside India (other
than NRI and OCB) may transfer by way of sale or gift, the shares or convertible debentures to
any person resident outside India (including NRIs).