India Tax & Regulatory
FEMA Pricing Guidelines (FDI Pricing Norms)
RBI/FEMA rules mandating that share transfers involving non-residents occur at a fair value determined per prescribed methodology, preventing under- or over-pricing.
Buyer Example
An NRI-backed fund acquiring 60% of a Bengaluru fintech startup must ensure the price per share isn't below the FEMA-prescribed fair value from a merchant banker's report. Buyer uses this compliance ceiling defensively to resist the seller's attempt to negotiate above the fair-value benchmark on a share-swap structure.