Globacom Pvt. Ltd., a tech Services Company headquartered in India, plans to engage in several foreign exchange transactions: (1) Send sponsorship…

CA Intermediate · Corporate and Other Laws · PYQS · January 2026
Globacom Pvt. Ltd., a tech Services Company headquartered in India, plans to engage in several foreign exchange transactions: (1) Send sponsorship funds worth USD 1,30,000 to support a private tech conference abroad, organized by a non-governmental association. (2) Remit royalty payments totaling USD 1,50,000 under a technical collaboration agreement for licensing software developed overseas. (3) Make a marketing payment exceeding - 15,000 in a foreign print publication to promote inbound tourism (targeting foreign visitors). (4) Sponsor several cultural exchange tours for college students for USD 80,000. The Finance Team must determine which transactions are permitted, which require prior government approval, and which are strictly prohibited under the applicable provisions of the Foreign Exchange Management Act, 1999 (FEMA).
(A) (A) Allowed freely as it's a promotion of trade.
(B) (B) Prohibited under Schedule I.
(C) (C) Requires prior approval under Schedule II.
(D) (D) Does not require approval from the Government if routed via EEFC or RFC account.

Suggested Answer and Working Notes:

Correct Answer: Option (A)

(A) Allowed freely as it's a promotion of trade.

Topics: The Foreign Exchange Management Act, 1999

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