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Who is an NRI?

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Q: Is a divorce degree given by a court in the USA recognized in India?

A: This is a complicated legal question and it requires proper legal advice. Therefore, please seek proper legal advice for this question.

Contact us for legal opinion regarding the same

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Dual Citizenship of India

 

Q: Can an NRI bring gold to India from the US and how much?

A: The RBI has granted general permission to NRIs to bring up to 10 kg of gold.

The NRI will have to pay import duty of Rs 250 per 10 gm. However, the import duty for gold bars serially numbered and weight expressed in metric units and for gold coins is Rs 100 per 10 gm.

This special rate is not applicable to popular tola bars (116 gm) known as biscuits.

 

Q: Can NRIs purchase existing shares/debentures of Indian companies by private arrangement?
 

Yes. Reserve Bank permits NRIs , on application in form FNC 7, to purchase shares/debentures of existing Indian companies on non-repatriation basis. An undertaking about non-repatriation is to be given in form NRU.
 

Q: Is it necessary for a resident, holding securities in Indian companies, to secure any approval from Reserve Bank on his becoming a non-resident for holding such securities?
 

No. Reserve Bank has granted general permission to companies in India to enter the overseas addresses of the shareholders in their books in such cases provided the companies obtain undertakings from the holders that they will not seek repatriation of any income or sale proceeds of the security.
 

Q: Is income/interest earned on investments/deposits held in India by NRIs on non-repatriation basis allowed to be repatriated?
 

Yes. Income/interest accruing during the financial year 1994-95 and onwards on bank deposits and investments held by NRIs with non-repatriation benefits will be eligible for repatriation as under:
Up to U.S. $ 1,000 or its equivalent in full and one-third of the balance income earned during the financial year 1994-95.
Up to U.S. $ 1,000 or its equivalent in full and two third of the balance income earned during the financial year 1995-96.
The entire income earned during the financial year 1996-97 and onwards.
The investment/principal amount of deposits made/held on non-repatriation basis will, however, not be allowed to be repatriated abroad.
What is the procedure to be followed for seeking repatriation in such cases?
NRIs should designate a branch of an authorised dealer through whom the remittance of income is to be made and make an application in form RCI to the designated branch giving details of incomes earned during the previous financial year alongwith a Chartered Accountant's Certificate. The designated branch will allow the remittance of net amount (i.e. after payment of tax) or credit it to NRE/FCNR account of the applicant.
What are the schemes available to NRIs for direct investments in India with repatriation benefits?
NRIs can make investments in new issues of shares/convertible debentures of Indian companies under direct investment schemes such as 24% scheme/40% scheme/100% scheme. They can also invest in the schemes of domestic Mutual Funds floated by public/private sector institutions/companies and bonds issued by public sector undertakings, Non-resident investors are not required to apply for permission to invest but the company concerned will have to obtain permission from Reserve Bank.
 

Q: What is 24% Scheme?

Under the 24% scheme, Indian companies engaged or proposing to engage in any activity including finance, hire purchase, leasing, trading or other services, establishment of schools/colleges. etc.(except agricultural/plantation activities) are allowed by Reserve Bank to issue shares/debentures to NRIs with repatriation benefits to the extent of 24% of the new issue.
 

Q: What is 40% Scheme?

Under the 40% Scheme, Indian companies engaged or proposing to engage in the following activities are allowed by Reserve Bank to issue shares/debentures to NRIs with repatriation benefits to the extent of 40% of the new issue.
Industrial and Manufacturing units
Hotels with 3, 4 or 5 star category
Hospitals and diagnostic centres
Shipping companies
Development of computer software
Oil exploration services
 

Q: Is remittance of interest/dividend to NRI investors freely allowed under the 24% /40% Scheme?

Yes. There is no ceiling or restriction on the amount of remittable dividend. Remittance of interest/dividend to NRI investors will be allowed by authorised dealers under the posers delegated to them.
What are the specified industries under the 100% Scheme?
Under 100% Scheme, NRIs are permitted to invest in high priority industries listed in Annexure III to the Statement on Industrial Policy dated 24th July 1991 of the Government of India up to 100% of the new issue.
 

Q: s dividend/interest earned in respect of investment made under the 100% Scheme freely remittable to the NRIs abroad?

Dividend/interest can be remitted freely except in the case of consumer goods industries where the outflow on account of dividend is required to be balanced by export earnings of the company either in the year of declaration of dividend or in the years prior to the declaration of dividend, This requirement is enforced for a period of seven years from the commencement of commercial production.
How does an NRI obtain permission of Reserve Bank for investment under the 24% or 40% or 100% Scheme?
The NRI investor need not apply to Reserve Bank. Application for necessary permission under the schemes should be made by the Indian company/firm to the Central Office of Reserve Bank in Mumbai in form ISD/ISD(R).
Besides the 24%, 40% and 100% Schemes is there any other scheme for investment by NRIs in the equity of Indian companies?
Yes. NRIs are permitted to undertake revival of sick industrial units by making bulk investment in them to the extent of 100 per cent either by way of purchase of existing equity shares or in the form of subscription to new equity issues.
Is the capital brought into India for revival of a sick Industrial unit allowed to be repatriated?
Yes.
How can an NRI obtain permission of Reserve Bank for investment in a sick industrial unit?
Application for necessary permission should be made by the Indian company to the Central Office of Reserve Bank in Mumbai in form RSU.
Under the existing Industrial Policy, investment by foreign collaborators upto 51% of the equity is allowed by Reserve Bank on repatriation basis in certain high priority industries. Can NRIs take up the balance 49% equity in such cases on repatriation basis?
Yes.
Can NRIs make investments in companies engaged in real estate development in India?
Yes. Investment upto 100% in the new issue of equity shares/convertible debentures of Indian companies engaged in the followed areas is allowed:
Development of serviced plots and construction of built up residential premises
Real estate covering construction of residential and commercial premises including business centres and offices
Development of township
City and region level urban infrastructure facilities including roads and bridges
Manufacture of building material
Financing of housing development
What is the procedure for obtaining Reserve Bank permission in this regard?
Applications for the purpose should be made by the concerned Indian company to the Central Office of Reserve Bank in Mumbai in form ISD(R).
Will repatriation of the original investment and/or dividend income be freely permitted?
Yes. Repatriation of original investment will be permitted after a lock-in period of three years from the date of issue of the equity shares/convertible debentures. In addition, OCBs will be permitted to repatriate net profit (upto 16 per cent) arising from the sale of such investment after the lick-in period of three year. Annual dividend/interest on equity shares/debentures can, however, be freely remitted subject to payment of tax.
Are investments in Air Taxi operations permitted to be made by NRIs?
Yes. Investments upto 100% equity participation for carrying on Air Taxi operations are permitted in terms of the guidelines issued by the Director General of Civil Aviation for Air Taxi operations. Applications for the purpose should be made to Reserve Bank (Central Office) in form ISD(R) by the concerned Indian company.
Are there any restrictions on repatriation of the investment made under this scheme or income earned thereon?
No. However, repatriation of the investment and /or remittance of dividend will be permitted only after the expiry of five years of operation and only out of accumulated net foreign exchange earnings.
Can NRIs invest in non-convertible debentures on repatriation basis?
Yes. Applications for necessary permission should be made to Reserve Bank (Central Office) by the concerned Indian company in form ISD.
What is the procedure to be followed for making investment in the schemes of domestic Mutual Funds or public sector bonds with repatriation benefits?
The concerned Fund/Public Sector Undertaking should obtain necessary permission from Reserve Bank for issue of units/bonds to NRIs. Applications for the purpose are required to be made to the Central Office of Reserve Bank in form ISD(R).
Can NRIs invest in 100% Export Oriented Units on repatriation basis?
Yes. NRIs will be permitted to invest up to 100% in 100% Export Oriented Units subject to obtaining approval from the Government of India ,Ministry of Industries (SIA) for setting up the EOU. In the case of units located in Export Processing Zones, approval from the Development Commissioner of the concerned zone is required to be obtained. Thereafter an application should be made to the concerned regional office of Reserve Bank in form ISD alongwith copy of Government approval for necessary clearance under FERA 1973.
Can NRIs acquire shares disinvested by Government of India in Public Sector Enterprises (PSEs) by inviting sealed tenders?
Yes. Reserve Bank has granted general permission to NRIs to acquire shares of PSEs on their bids being successful provided the holding of a single NRI investor does not exceed one per cent of the paid up capital of the PSE concerned , the purchase consideration /bid money is paid by way of remittance from abroad or by debit to his NRE/FCNR accounts.
What is the procedure for issue of rights entitlement to NRIs?
The concerned company should approach Reserve Bank for issue of rights entitlement to NRIs in the prescribed form if on repatriation basis. However, rights entitlement on non-repatriation basis would be covered by the general permission.
What is the procedure required to be followed by NRIs for renunciation of rights entitlement?
NRIs can make an application to Reserve Bank by a letter detailing therein the folio number of the shares held and the manner in which the rights are being sold.
What is the procedure for issue of bonus shares?
The concerned Indian company should approach Reserve Bank for issue of bonus shares to NRIs if the original investment is on repatriation basis. Issue of bonus shares in respect of investment on non-repatriation basis is covered by general permission.
Can NRIs obtain loans abroad against the collateral of share/debentures of Indian companies?
Yes. Authorised dealer have been permitted to grant loans/overdrafts abroad to NRIs through their overseas branches and correspondents against collateral of the shares/debentures of Indian companies held by them, provided the concerned shares/debentures were acquired on repatriation basis.
Can sale proceeds of the shares/debentures be remitted abroad for liquidation of outstanding against such loans/overdrafts?
Yes, subject to payment of Income tax, Capital Gains tax etc. payable, if any.
What is the Portfolio Investment Scheme?
Under this scheme, NRIs are permitted to acquire shares /debentures of Indian companies or units of domestic Mutual Funds through the stock exchange/s in India.
What is the procedure for making applications?
The application is to be submitted to Reserve Bank through a designated branch of a bank in India in one of the prescribed forms, i.e. NRC/NRI/RPC/RPI.
What is a designated branch?
Reserve Bank has authorised a few branches of each bank to conduct the business under Portfolio Investment Scheme on behalf of NRIs . These branches are the main branches of major commercial banks located close to the stock exchange/s. NRIs will have to route their applications through any of the designated bank branches who have authorisation from Reserve Bank.
Whether NRI can apply through more than one designated branch?
No. Each NRI has to select one branch for this purpose for investment on repatriation/ non-repatriation basis.
Is it necessary to maintain a bank account with the designated branch through whom the application is made?
It is advisable to maintain a bank account with the designated branch for administrative convenience.
What is the validity period of Reserve Bank approval for the purchase of shares/debentures of Indian companies or units of domestic Mutual Funds?
Reserve Bank approval is valid for a period of five years from the date of issue. This can be renewed further by making a request by means of a simple letter.
Is there any ceiling on the investment under the Portfolio Investment Scheme?
There is an overall ceiling of 5% of paid- up equity share capital of the company/paid-up value of each series of convertible debentures for purchase by NRIs /OCBs. The overall ceiling can be raised to 30% if the company concerned passes a special resolution to that effect in its general body meeting and a board resolution. Individually, NRIs/OCBs can make investment upto 1% of the paid-up equity share capital/each series of convertible debentures. However, there is no ceiling on investment in domestic Mutual Funds.
Can NRIs keep deposits with companies in India with repatriation benefits?
Yes. NRIs are permitted to keep deposits with public limited companies in India for a minimum period of three years subject to certain ceilings/conditions. Application for the purpose is required to be made by the company receiving the deposits through an authorised dealer.
Do NRIs need permission of reserve Bank for placing funds in fixed deposits with firms/companies on non- repatriation basis?
Yes. Permission for placement of funds in fixed deposits with firms/companies in India is granted by Reserve Bank on application by the depositor or the deposit accepting firm/company, on non-repatriation basis, subject to certain ceilings/conditions.
Are NRIs permitted to invest in Commercial Paper(CP) issued by Indian companies?
Yes.General permission has been granted by Reserve Bank to Indian companies to issue CP to NRI individuals subject to the conditions that the amount invested will not be repatriated outside India and the CP will not be transferable.
Is permission of Reserve Bank required for sale/transfer of Government securities/units?
No. Authorised dealers have been permitted to undertake sale of Government securities/units on behalf of NRIs without prior approval of Reserve Bank. Sale/maturity proceeds can be remitted abroad if the original investment was made out of funds remitted from abroad or funds in NRE/FCNR accounts. Otherwise, they will have to be credited to NRO account of the holder.
Is permission of Reserve Bank required by NRIs for sale/transfer of shares/debentures of Indian companies to other NRIs?
No. Transfer of shares/debentures of Indian companies by NRIs to other non-residents does not require permission of Reserve Bank. However, the transferee NRI would need permission for purchase of such shares for which an application is required to be made to Reserve Bank in form FNC 7.
Can NRIs transfer/sell their shares/ debentures/bonds held on non-repatriation basis to residents freely?
Yes. General exemption has been granted by Reserve Bank for transfer/sale of shares/debentures/bonds by NRIs/OCBs through stock exchanges if such transfers are made in favour of an Indian citizen or a person of Indian origin or a company incorporated in India and sale proceeds thereof are credited to NRO account.
What is the procedure for sale/transfer of shares/debentures/bonds held by NRIs with repatriation benefits?
In the case of shares /debentures /bonds acquired by NRIs through stock exchanges under the Portfolio Investment Scheme, general exemption has been granted for transfer through stock exchanges provided the sale is arranged through the same designated branch through whom they were purchased. In other cases, applications for necessary permission is required to be made to Reserve Bank in form TS 4.
What is the procedure to be followed by NRIs for sale/transfer of shares /debentures to residents by private arrangements?
NRIs are required to submit application in form TS 1 to Reserve Bank for sale of shares/debentures by private arrangements.
Can shares/debentures be given away as gifts to relatives?
Yes Reserve Bank has granted general permission to NRIs to transfer, by way of gift, shares, bonds and debentures of Indian companies held by them with Reserve Bank's permission to their resident close relative/s.

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Is it a Nightmare for an NRI Doing Business in India?


This question is often asked if it is a nightmare for an NRI or a PIO doing business in India?

Many NRI's will tell you that it is in fact a nightmare for NRI's to do business in India. Many NRI's have burnt their fingers in their ventures in India. Doing Business in India is tough for an NRI or a PIO who is used to smooth ride in developed world, where it is relatively easy to do business. The problem becomes compounded when an NRI does not find seek proper legal help before venturing into a business in India.

However, if an NRI ventures in a planned and methodical manner, under proper legal guidance, he or she can succeed.  The following are some of the points an NRI should keep in mind before starting any business in India:

  • First, get a PIO or Person of Indian Origin Card (if you are a PIO, NRI do not require a PIO card) that puts you on a par with an Indian as far as business and tax matters are concerned. Among other benefits, a PIO has visa-free entry for 15 years and allows you to engage in business and own property, like any Indian.
  • Second, get a PAN or Permanent Account Number card issued by the income-tax department. Any person - NRI or Indian - making an investment of over Rs.50,000 is required to quote his/her PAN number. This also applies to purchases of over Rs.50,000. Since you plan to go into business in India, you will eventually file your income-tax returns annually. So you need a PAN card that is also a very useful identification document because it has your photo on it and you can show it in many places where you wish to be identified as an Indian - and not overcharged as an NRI!
  • Third, Choose a Business Partner in India. Obviously, it is impossible for you to go into business on your own unless you want to move to India. If not, you need partners for your proposed venture. You will identify and select your partners on the basis of their track record, integrity and other personal attributes. Be careful of the single and most common pitfall of going into business with your relatives and close friends on the basis of your family relations or friendship. A great majority of NRI business ventures have come to grief because of this 'emotional' alliance. When the business collapses, you have lost not only your money but also a precious relationship.
  • Four, Choose a Proper Business Entity. A simple partnership is a viable takeoff for your venture although it has some pitfalls. All it takes is a lawyer to draw up the agreement between you and your partner(s) and register on a legal, stamp paper of Rs.100 and it takes just a few days to complete this simple formality. When your turnover exceeds four million rupees, you need the services of a qualified accountant to audit your accounts and file your tax returns. Limited liability companies take a lot of time to get off the ground. You need a lawyer to register the name of your company called a 'private limited company'. This involves paying a small fee and suggesting at least three proposed names. It takes about a week for the Registrar of Companies to inform you which of the three proposed names is available. On deciding its name, the lawyer prepares its memorandum and articles of association and files them with the appropriate fees depending on value of the share capital. It takes at least one month to carry out all these registration of company formalities. These 'private limited companies' are regulated under a host of 'company laws' that cover most organizational and accounting matters from writing the minutes of every board meeting to filing of its annual returns to the working of company directors to the format of their balance sheets. There are rules and regulations all the way during the operations of this company and if you want to close down this limited liability company, you must again go to the lawyer/accountant and it can take up to eight or ten years to obtain the permission of the High Court for winding up the company. In addition to the court fees, there are lawyers' fees to be borne by the directors. No wonder NRIs shy away from getting into business in India, especially in private limited liability companies.
  • Five, once you take all these steps, you are - at last! - ready to launch into business. Of course, you have decided the area in which you are going to engage in business. So your company should become a member of the different business organizations looking after this sector in addition to the local chamber of commerce.
  • Many NRIs have ventured into exports from India as they help in marketing through their contacts. All export/impost business must be registered with the Director General of Foreign Trade. The application form requires a bank account number and a letter from the bank plus various details of partners/directors. The registration takes about two to three weeks.
  • Seven, getting roper legal guidance is very important. In starting a business once should not be 'penny wise and pound fool.' 

This all may take some time but once you go through the grind it's not a nightmare.
 

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PIO doctors may be allowed to practice in India

Physicians who are Persons of Indian Origin (PIO's) maybe allowed to practice in their native country, India. The government of India is considering such a proposal.

 

PIO will have parity with NRI's in some cases

Persons of Indian Origin (PIO's) will now have parity with NRIs on 'inter-country adoption' and domestic airfares in India
 

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RBI relaxes remittance norms for Indians


One can now buy shares or mutual funds abroad or park funds as deposits. Indians can also give an expensive gift and even donate up to US$50,000 a year

The options for resident Indians to invest overseas have increased. The Reserve Bank of India (RBI) has formalized the liberalized remittance scheme of US$50,000 per year for resident Individuals.

With this, one can now buy shares or mutual funds abroad or park funds as deposits in international banks. Indians can also give an expensive gift to the loved ones living abroad. Even donations up to US$50,000 a year is now a possibility.

Earlier, a resident Indian could invest in overseas companies listed on a recognized stock exchange and hold at least 10% stake in an Indian company listed overseas. Now, Indians can invest up to US$50,000 in any listed foreign entity.

The move has been designed with a view to simplifying the procedures and providing greater flexibility in foreign exchange transactions, the RBI says in a notification on its web site.

The central bank has also done away with the sub-limits that restricted remittances towards gifts and donations at US$5,000.

For all remittances, a resident individual will have to furnish PAN number and source of funds along with the beneficiary's name, address and account number.

All banks, both Indian and foreign ( including those not having an operational presence in India) should seek prior approval from the RBI for selling deposits or other financial products to residents.

Indian banks will have to seek the central bank's clearance for acting as agents for overseas mutual funds or any other foreign financial services company.


 

 

 

 
 


Marriage in India

A. Religious Ceremonies

In India, a religious marriage ceremony is considered a legal marriage.  However, for Hindus, Jains, Sikhs and Buddhists, the certificate issued by the temple or gurudwara may not be legally sufficient for all purposes.  Rather, members of these religions may seek a formal marriage certificate from the Registrar of Marriages.  If one of the parties is a U.S. citizen, the registrar may request a “no objection letter” from the U.S. Embassy or Consulate, and also may request proof of termination of any previous marriages, before a marriage certificate will be issued.

If the parties are married in a Christian, Muslim, Parsi, Jewish, Baha’i or other religious ceremony, the certificate issued by the religious authority (e.g., the church’s marriage certificate, the mosque’s nikah nama, etc.) generally is sufficient proof of marriage, and no certificate from the marriage registrar is necessary.

B. Civil Ceremonies

Parties who do not wish to marry in a religious ceremony can instead opt for a civil ceremony pursuant to the Special Marriage Act.  Again the American citizen who wishes to participate in a civil marriage ceremony may be required to present to the marriage officer a “no objection letter” from the U.S. Embassy or Consulate, as well as proof of termination of any previous marriages.  The parties generally are required to wait at least 30 days from the date of initial application to formalize the marriage so that the marriage officer can publish a newspaper ad allowing for the opportunity for any objections to the marriage to be voiced.

The marriage registrar’s office generally is located in a local community’s court complex or municipal building.

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India passed a law to grant dual citizenship to the people of Indian origin (PIO) on December 22, 2003. The law received the President's approval on January 7, 2004, and became operational from 2nd December 2005. The law will help grant dual citizenship to Persons of Indian Origin (PIOs) belonging to, or having citizenship of other countries subject to certain conditions. The grant of dual citizenship was intended to remove for those who have taken foreign passports, the obstacle in travel to and from India, permit investment in business ventures and foster a greater sense of belonging.

The Overseas citizenship of India (OCI) commonly known as dual citizenship is granted to persons who migrated from India and acquired citizenship of a foreign country other than Pakistan and Bangladesh. They are eligible for grant of OCI as long as their home countries allow dual citizenship in some form or the other under their local laws. However persons registered as OCI shall not have any voting rights and rights for public employment.

Every registered OCI will be issued a registration certificate which is printed like an Indian passport in different colour and an OCI visa sticker will be pasted in the person’s foreign passport. These two documents will have the photograph of the individual and all necessary security features.

Eligibility

A foreign national, who was eligible to become citizen of India on 26.01.1950 or was a citizen of India on or at anytime after 26.01.1950 or belonged to a territory that became part of India after 15.08.1947 such as Sikkim, Pondicherry, Dadra and Nagar Haveli, Goa, Daman and Diu and his/her children and grand children, provided his/her country of citizenship allows dual citizenship in some form or the other under the local laws, is eligible for registration as Overseas Citizen of India (OCI). Minor children of such persons are also eligible for OCI. However, if the applicant had ever been a citizen of Pakistan or Bangladesh, he/she will not be eligible for OCI. A person registered as OCI is eligible to apply for grant of Indian citizenship under section 5(1)(g) of the Citizenship Act, 1955 if he/she is registered as OCI for five years and has been residing in India for one year out of the five years before making the application.

Benefits

Once you are accepted and registered as an Indian citizen, you will receive the following benefits:

A registration certificate to prove your dual status

Overseas citizen passport in addition to the passport of the country of which you are already a citizen

You will no longer need to apply for a visa to travel to India. You have rights for multiple entry and a multipurpose life long visa to visit India. However, you must carry and present both passports at the time of travel.

You will not have to go through any registration formalities for staying in the country for any length of time.

You will no longer have to provide separate documentation for admission to any college/institution or for employment.

You will be treated the same as a non-resident Indian with respect to the facilities available to the latter in the economic, financial and educational field, except in the acquisition of agricultural or plantation properties.

Your children will be eligible for facilities as available to children of NRIs for obtaining admission to educational institutions in India, including medical colleges, engineering colleges, institute of technology, institute of management etc. under the general category

You can make the most of facilities under the various housing schemes of LIC, State Government and other government agencies

Application Procedure

The application of registration for Overseas Citizenship of India can be made in the prescribed form in India or the Indian Missions abroad. All application will be processed in India. This Registration Certificate once received is valid for life unless renounced or cancelled.

The registration form should be completed and submitted in triplicate by the applicant himself;

i) In India

To the Collector within whose jurisdiction the applicant is ordinary resident for transmission to the Central Government through the State Government or Union Territory Administration, as the case may be.

ii) Elsewhere

To the Indian Consulate/Embassy whose jurisdiction the country of which an applicant is a citizen for this for transmission to the Central Government.

Applications for grant of OCI will be received by all Indian Missions/Posts outside India and by FRROs/CHIO and OCI Cell in Foreigners Division of MHA (Ministry of Home Affairs) in India. An eligible person may apply in the Indian Mission/Post of the country of his/her nationality or in the Indian Mission/Post of any other country if he/she is ordinarily residing in that country. He/she will have to submit proof for his/her parents/grand parents having migrated from India after 26th January, 1950 or having been eligible to be granted Indian citizenship on that date or having been resident of such territories like Goa, Pondicherry, Sikkim.
 

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