law: Foreign Exchange Management Act, 1999 
  6. Capital account transactions 
  (1) Subject to the provisions of sub-section (2), any person may
  
  sell or draw foreign exchange to or from an authorized person for a capital
  
  account transaction.
  (2) The Reserve Bank may, in consultation with the Central
  
  Government, specify- 
  1. any class or
  
  classes of capital account transactions which are permissible;
  2. the limit up to
  
  which foreign exchange shall be admissible for such transactions:
  Provided  that the Reserve Bank shall not impose
  
  any restriction on the drawal of foreign exchange for
  
  payments due on account of amortization of loans or for depreciation of direct
  
  investments in the ordinary course of business.
  (3) Without prejudice to the generality of the provisions of
  
  sub-section (2), the Reserve Bank may, by regulations prohibit, restrict or
  
  regulate the following,-
  1. transfer or issue
  
  of any foreign security by a person resident in India;
  2. transfer or issue
  
  of any security by a person resident outside India;
  3. transfer or issue
  
  of any security or foreign security by any branch, office or agency in India of
  
  a person resident outside India;
  4. any borrowing or
  
  lending in foreign exchange in whatever form or by whatever name called;
  5. any borrowing or
  
  lending in rupees in whatever form or by whatever name called between a person
  
  resident in India and a person resident outside India;
  6. deposits between
  
  persons resident in India and persons resident outside India;
  7. export, import or
  
  holding of currency or currency notes;
  8. transfer of immovable
  
  property outside India, other than a lease not exceeding five years, by a
  
  person resident in India;
  9. acquisition or
  
  transfer of immovable property in India, other than a lease not exceeding five
  
  years, by a person resident outside India;
  10. giving of a
  
  guarantee or surety in respect of any debt, obligation or other liability
  
  incurred,- 
  ( i ) by a person resident in India and
  
  owed to a person resident outside India; or
  (ii)  by a person resident outside India.
  
  
  (4) A person resident in India may hold, own, transfer or invest
  
  in foreign currency, foreign security or any immovable property situated
  
  outside India if such currency, security or property was acquired, held or
  
  owned by such person when he was resident outside India or inherited from a
  
  person who was resident outside India.
  (5) A person resident outside India may hold, own, transfer or
  
  invest in Indian currency, security or any immovable property situated in India
  
  if such currency, security or property was acquired, held or owned by such
  
  person when he was resident in India or inherited from a person who was
  
  resident in India.
  (6) Without prejudice to the provisions of this section, the
  
  Reserve Bank may by regulation prohibit, restrict, or regulate establishment in
  
  India of a branch, office or other place of business by a person resident
  
  outside India, for carrying on any activity relating to such branch, office or
  
  other place of business.