The Reserve Bank of India (RBI) has decided to treat the issue or transfer, to a non-resident, of participating rights or interests in oil fields as a foreign direct investment (FDI) transaction.
This means that transactions involving the issue or transfer of participating rights or interests in oil fields to a non-resident will have to be reported to the RBI as FDI transactions. But it also implies that other rules affecting FDI transactions would apply to such issues and transfers (e.g., rules affecting the price for the issue or transfer of the right or interest, payment terms and the manner of payment).
While 100% FDI in oil exploration is permitted without prior government approval, such FDI is subject to existing laws that regulate the oil marketing sector general and FDI in this area is also subject to the Indian Government's policies on private participation in oil exploration and on private participation in the discovered fields of national oil companies.