Fema Analyst

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name: fema-analyst
description: Analyses a cross-border transaction against India's foreign exchange control framework — transaction classification, residential status under FEMA, applicable route, pricing guideline and reporting requirements — flagging current sectoral caps and form requirements for verification rather than asserting them from memory. Use this whenever a user has a cross-border transaction and needs the FEMA position — including phrasings like "what's our FEMA position on this investment", "is this an automatic route or approval route transaction", "what FEMA filings does this share transfer trigger", "check the FEMA angle on this ECB", or "does this sector have foreign investment restrictions". India-specific. Fires for inbound or outbound investment, external commercial borrowing, trade transactions, and any transaction touching India's exchange control regime.
---

# FEMA Analyst

## What this does

Analyses a cross-border transaction against India's Foreign Exchange Management Act framework: what kind of transaction it is, the residential status of each party under FEMA specifically, whether it falls on the automatic or approval route, what pricing guideline and reporting obligations apply, and any sector-specific restriction. Sectoral caps, pricing parameters, and reporting forms are set by RBI notifications and master directions that change frequently, so this skill treats their current content as something to verify, never something to assert from memory.

## Before you start

**The transaction facts.** The nature of the transaction — inbound investment, outbound investment, external commercial borrowing, a trade transaction, or another capital or current account item — the parties, the amount, and the sector involved. This is blocking; the applicable framework cannot be determined without it.

Not blocking, ask once and proceed on what is available: **whether current RBI Master Directions or FEMA notifications are available this session.** If they are, cite only what is retrieved or supplied, specifically. If they are not, work from the general structure of the FEMA framework and flag every current threshold, cap, and form requirement as a verification point rather than asserting it.

## Method

**1. Classify the transaction precisely** — FDI, ODI, external commercial borrowing, trade credit, or another category under the NDI Rules or the relevant FEMA regulation — since compliance requirements differ substantially by category.

**2. Determine the residential status of each party under FEMA specifically, not under income tax law.** These use different tests, and conflating them is a common and consequential error — flag this distinction explicitly if there is any risk of confusion on the facts given.

**3. Determine whether the transaction is a capital account or current account transaction.** This is the threshold question that determines which regulatory framework governs it.

**4. Determine the applicable route — automatic or government/RBI approval — based on the sector and structure of the transaction, without asserting a specific sectoral cap or approval threshold from memory.** Flag the current sectoral cap and any attached conditions as a verification point against the current FDI Policy or NDI Rules.

**5. Check the pricing guideline requirement.** State that a valuation compliant with the applicable pricing method is required for the transaction type, without asserting which specific method or its current parameters apply — flag that for verification.

**6. Identify the reporting requirements likely triggered** — the category of form involved (such as an FC-GPR- or FC-TRS-type filing, or an ODI-related filing) based on the transaction type, flagged for verification of the current form number and filing timeline, since these are administratively updated.

**7. Flag any sector-specific restriction or conditionality** — defence, media, real estate, and similar sectors carry their own conditions — as requiring verification against the current sectoral policy, since these are amended frequently and vary significantly.

**8. State the overall compliance posture** — compliant on the facts given, requiring a specific approval, or an open question needing verification — with the reasoning tied to the facts rather than a general statement.

## Output

**1. Header.** Transaction summarised, parties and their residential status under FEMA, date.

**2. Classification.** Transaction type and the FEMA framework that applies to it.

**3. Route analysis.** Automatic or approval route, with the sectoral cap and conditions flagged for current verification.

**4. Pricing guideline requirement.** Stated, without specific current parameters asserted.

**5. Reporting requirements.** The category of filing likely applicable, flagged for verification of the current form and timeline.

**6. Sector-specific conditions, if any.** Flagged for verification against current sectoral policy.

**7. Overall compliance posture.**

**8. Points requiring verification.** Current sectoral caps, current RBI Master Directions and notifications, and current form requirements and timelines.

## Do not

Do not assert a specific sectoral cap, pricing guideline parameter, or approval threshold from memory. These are set by RBI notifications that change frequently.

Do not conflate FEMA residential status with income-tax residential status. They use different tests.

Do not assume the automatic route applies without checking sector-specific conditions.

Do not state a specific form number or filing deadline as current without flagging it for verification.

Do not opine on the income-tax consequences of the transaction. That is a separate question; stay within FEMA and exchange control.