With the Securities and Exchange Board of India (SEBI) making their stand clearer on the put/ call options in the Cairn Vedanta deal/Vulcan Engineering, and the Reserve Bank of India (RBI) indicating that they may consider such options as external commercial borrowing, has opened a can of worms and has definitely created a lot of uncertainty which could affect foreign direct investment. This article summarizes the views of the regulator and analyses some of the issues involved.