Reference

Glossary

68 terms used across this guide, in plain English.

AD bank: Authorised dealer bank: a bank permitted by RBI to handle foreign exchange. It receives FDI remittances and files several FEMA reports for the investee.
AGILE-PRO-S: Form linked to SPICe+ that can obtain GST, EPFO and ESIC registrations alongside incorporation.
ALMM: Approved List of Models and Manufacturers, kept by MNRE. List-I covers solar modules, List-II cells, and ALMM-Wind turbines; many tenders require listed equipment.
APA: Advance Pricing Agreement: an agreement with the tax authority fixing the transfer-pricing method for future years. Unilateral IT APAs are to be fast-tracked to about two years.
Automatic route: FDI that needs no prior government approval; the investee reports after the event, for example through Form FC-GPR.
BOT: Build-Operate-Transfer: a provider builds and runs a centre, such as a GCC, for a client and later transfers ownership to it.
Branch office: Office of a foreign company permitted by RBI for activities such as export and import, consultancy and research for the parent. Taxed at the foreign-company rate.
CDSCO: Central Drugs Standard Control Organisation: India's national regulator for drugs, medical devices and cosmetics, including import licences and clinical trials.
CEPA: Comprehensive Economic Partnership Agreement, the form used for India's agreements with the UAE and Oman.
CETA: Comprehensive Economic and Trade Agreement between India and the UK, in force from 15 July 2026.
Concessional regime: Optional corporate tax regime (s.200, Income-tax Act 2025) at 22% plus surcharge and cess, 25.168% effective; most deductions forgone and no MAT.
Crore: Indian unit equal to 10 million. ₹1 crore = ₹10 million.
DPDP Act: Digital Personal Data Protection Act 2023. Its Rules were notified on 13 November 2025, with core duties applying from 13 May 2027.
DPIIT: Department for Promotion of Industry and Internal Trade: sets FDI policy, issues Press Notes, publishes FDI data and routes government-route proposals.
DTA: Domestic tariff area: the part of India outside SEZs and other customs-bonded zones.
DVA: Domestic value addition: the share of a product's value created in India. PLI-Auto pays only on products with at least 50% DVA.
e-B-4 visa: Production investment visa for specialists installing and commissioning equipment; replaced the e-PLI visa, with online sponsorship from 17 December 2025.
ECB: External commercial borrowing: a loan from a non-resident lender. Since February 2026 the limit is the higher of USD 1 bn outstanding or 300% of net worth.
ECMS: Electronics Component Manufacturing Scheme (MeitY): turnover-linked, capex or hybrid incentives. Component window closed; equipment window to April 2027.
ELI: Employment Linked Incentive (PM Viksit Bharat Rozgar Yojana): support per additional employee for jobs created between 1 August 2025 and 31 July 2027.
EPCG: Export Promotion Capital Goods scheme: zero-duty import of capital goods against an export obligation of six times the duty saved, within six years.
EPFO: Employees' Provident Fund Organisation, which runs the provident fund. Foreign nationals on Indian payroll are 'international workers' under the EPF Scheme 2026.
ESIC: Employees' State Insurance Corporation. ESIC registration can be obtained through AGILE at incorporation and applies where relevant.
FC-GPR: Form reporting the issue of shares to a foreign investor, filed on RBI's FIRMS portal within 30 days of issue.
FC-TRS: Form reporting a transfer of shares between a resident and a non-resident, filed within 60 days of transfer or payment, whichever is earlier.
FDI: Foreign direct investment: equity investment by a non-resident in an Indian entity, subject to sector caps, the approval route and FEMA pricing and reporting.
FEMA: Foreign Exchange Management Act, under which RBI and the government regulate foreign investment, borrowing and remittances.
FIF portal: Foreign Investment Facilitation portal, part of NSWS, for government-route FDI applications and land-border prior reporting.
FIRMS: Foreign Investment Reporting and Management System: RBI's portal for FDI reports such as FC-GPR, FC-TRS and LLP (I).
FLA return: Annual return on foreign liabilities and assets, filed with RBI by 15 July each year by companies and LLPs that received FDI.
FPI: Foreign portfolio investor registered with SEBI under the FPI Regulations 2019, investing in Indian securities.
FRRO: Foreigners Regional Registration Office: foreigners staying more than 180 days, including most employment-visa holders, register shortly after arrival.
FTA: Free trade agreement.
GAAR: General anti-avoidance rule, which can override treaty benefits. In Tiger Global (January 2026) it was used to deny Mauritius treaty relief.
GCC: Global capability centre: a unit that a multinational group owns and runs in India for technology, engineering, analytics or business operations.
GCC as a Service: Model in which the client owns the entity from day one while a provider handles feasibility, incorporation, hiring, payroll and governance.
GIFT City: City in Gujarat that hosts India's International Financial Services Centre (GIFT IFSC).
Government route: FDI that needs prior approval, applied for through the FIF/NSWS portal and decided by the administrative ministry.
GST: Goods and services tax. From 22 September 2025 there are two main rates, 5% and 18%, plus 40% for a select few items.
IEC: Importer Exporter Code issued by DGFT, needed to import or export goods and services.
IEM: Industrial Entrepreneur Memorandum (Parts A and B) filed with DPIIT on NSWS only; Part B is filed at commercial production.
IFSC: International Financial Services Centre. IFSC units can deduct 100% of eligible income for 20 consecutive years out of 25.
IFSCA: International Financial Services Centres Authority, regulating IFSC business in place of RBI, SEBI, IRDAI and PFRDA.
Income-tax Act 2025: Law that replaced the Income-tax Act 1961 from 1 April 2026; tax year 2026-27 is the first year under it.
IRDAI: Insurance Regulatory and Development Authority of India, which licenses insurers and verifies foreign investment in them.
ISM: India Semiconductor Mission, which runs Semicon 2.0 support for fabs, packaging, equipment, materials and design.
Lakh: Indian unit equal to 100,000. ₹1 lakh crore = ₹1 trillion.
Land-border rule: Rule requiring government approval for investors from, or beneficially owned by, a country sharing a land border with India; up to 10% non-controlling is automatic after prior reporting.
Liaison office: Representative office of a foreign company that may not carry on business; generally valid for three years.
LLP: Limited liability partnership. FDI is automatic only in sectors fully open under the automatic route with no FDI-linked performance conditions.
Managed Teams: Model in which a provider recruits, employs and manages a dedicated team for a client, which keeps strategic direction.
MAT: Minimum alternate tax on book profit: 14% from tax year 2026-27 for companies outside the concessional regime, and now a final tax.
MOOWR: Manufacturing and Other Operations in Warehouse Regulations (s.65, Customs Act): bonded manufacturing that defers import duty until domestic clearance.
NBFC: Non-banking financial company registered with RBI; needs net owned funds of ₹10 crore from the outset.
NDI Rules: Foreign Exchange Management (Non-debt Instruments) Rules, which give legal effect to FDI policy. Draft replacement rules were consulted on in July–August 2026.
NSWS: National Single Window System, the national portal for business approvals, including IEM and the FIF portal.
PE: Permanent establishment: a taxable presence of a foreign company in India, such as a fixed place of business. See the Hyatt ruling (2025).
PLI: Production Linked Incentive: payments on incremental sales of goods made in India. Schemes in 14 sectors now pay approved applicants only.
Press Note: DPIIT notice amending FDI policy, given legal effect through amendments to the NDI Rules.
RoDTEP: Remission of Duties and Taxes on Exported Products: remission at notified rates, extended to 31 December 2026.
Safe harbour: Transfer-pricing margin the tax authority accepts without audit. For IT and IT-enabled services it is 15.5% on cost, for taxpayers up to ₹2,000 crore.
SEP: Significant economic presence: a taxable presence created by payments from India above ₹2 crore a year or interaction with 300,000 or more Indian users.
SEZ: Special economic zone. Units are approved by the SEZ Development Commissioner; GIFT City IFSC units also receive their approval from the SEZ authority.
SGST: State GST, the state's share of GST on intra-state supplies. Many state policies reimburse it as an incentive.
SPICe+: Integrated MCA form that incorporates a company and allots DIN, PAN and TAN in one filing.
STPI: Software Technology Parks of India, which approves STP units; such units get duty-free imports and may sell domestically up to 50% of exports.
TEPA: Trade and Economic Partnership Agreement between India and EFTA, in force from 1 October 2025.
Transfer pricing: Rules on pricing transactions between related parties, such as a GCC and its parent. The IT safe harbour and APAs are two ways to settle the price.