FDI-FEMA-Interest on Loan to Mauritius based wholly owned subsidiary by Indian Unlisted Public Co

Jayanta Bandyopadhyay (377 Points)

26 July 2025  

We, family owned Indian Unlisted Public Ltd Co ,have a wholly owned subsidiary and gave loan to Mauritiis based WOS . As per agreement, 5% interest to be charged. However, this is not done in books of accounts since 2022. WOS is loss making unit and ultimately even if interest is charged, the loss would go up and it will be passed on to Indian Parent. Both are related party. Can Indian Co waive interest on loan on its own? Is there any violation of FDI/FEMA? Kindly guide.