Compulsorily convertible debentures (CCDs) raised under FEMA's FDI Regulations are treated as:

1. FEMA FDI Regulations — fully and mandatorily convertible debentures + preference shares are treated as EQUITY INSTRUMENTS for the purpose of FDI. 2. Partly convertible or optionally convertible instruments are treated as ECB/debt. 3. Hence (B). _Source: ICAI BoS CA Inter Paper 2 — FEMA 1999_