AIFs can only engage in equity and equity-linked securities of offshore venture capital firms. The phrase "offshore venture capital undertakings" is defined in the 2015 Circular as a foreign firm whose shares are not listed on any recognised stock exchange in India or elsewhere. AIFs are not permitted to participate in joint ventures or totally owned subsidiaries in other countries. AIFs and VCFs may invest overseas only in firms with which they have established some sort of Indian relationship in order to generate indirect benefits for India.
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