Your Indian company, majority foreign-owned, is investing in another Indian company. That's not a domestic deal, it's indirect FDI

The natural assumption is that a transaction between two MCA-registered Indian companies is purely domestic, no different from any other Indian-to-Indian investment. Rule 23 doesn't test where either company is incorporated, it tests who controls the investing company. Once your own company crosses the Foreign Owned or Controlled Company line, over 50% non-resident equity, or non-resident control of the board or management, any equity investment it makes into another Indian entity is indirect foreign investment, reported the same way a fresh piece of direct FDI would be, even though no money is coming from outside India in that specific transaction.

Form DI goes to RBI through the FIRMS portal, due within 30 days of the allotment of equity instruments in the company being invested into. A separate DPIIT intimation is also due within 30 days, but that clock is measured from the investment itself, the date of remittance, not the allotment date. The two dates don't always land on the same day, and treating them as one filing with one deadline is an easy way to miss whichever one falls first.

A downstream investment can only be funded from abroad or from the investing company's own internal accruals, its retained earnings or reserves. It cannot be funded with money the company has borrowed domestically, a working-capital loan or an overdraft used to fund a downstream investment breaches this condition regardless of how correctly the Form DI itself is filed. Tracing the actual source of the funds before the investment is made avoids a filing that looks clean on paper but rests on a funding source the rule doesn't allow.

This isn't only about a fresh investment your company makes. If an entity that originally invested in your company as an ordinary resident later itself becomes an FOCC, because it took on its own foreign investment or foreign control, RBI's own January 2025 update requires that change to be reported as a reclassification of its existing investment into downstream investment, within 30 days of the investor's own status changing. The shares in your company never moved, but the reporting obligation now attaches to them regardless, because the character of the investor did.

The recurring pattern: the investment closes on the understanding that two Indian entities transacting need no RBI filing, and nobody separately checks whether the investing company itself crossed the FOCC threshold at some point before this deal. It surfaces at a later funding round's diligence, or when DPIIT or RBI queries the structure directly, by which point the investment has been sitting unreported, sometimes for years, and regularising it after the fact is a materially harder conversation than filing Form DI and the DPIIT intimation on time in the first place.