Mumbai: Foreign Venture Capital Investors (FVCIs) can invest in Indian startups without prior permission of the RBI, the central bank said on Thursday.

Sebi-registered FVCIs have also been permitted to invest in unlisted firms in sectors like biotechnology, nanotechnology and dairy without prior permission of the RBI. They will not require any approval from Reserve Bank and "can invest in...equity or equity linked instrument or debt instrument issued by an Indian 'startup' irrespective of the sector in which the startup is engaged," it said.

The RBI said the extant regulatory provisions have been reviewed and amended in order to "further liberalise and rationalise the investment regime for FVCIs and to give a fillip to foreign investment in the startups".

As per the amendment, FVCIs will not require any approval from RBI and can invest in "equity or equity linked instrument or debt instrument" issued by an Indian company in certain sectors whose shares are not listed.

The sectors are biotechnology, IT related to hardware and software development, nanotechnology, seed research and development, research and development of new chemical entities in pharmaceutical sector, dairy, poultry, production of bio-fuels, hotel-cum-convention centres and infrastructure.

FVCIs can also open a foreign currency account and/or a rupee account for the purpose of making transactions. Also, there will be no restriction on transfer of any security/instrument held by the FVCI to any person resident in or outside India.