last month India has scrapped the 25-year old foreign investment advisory body(FIPB) as it looks to attract more FDI by providing quick approvals under a single-window clearance system.
The finance Ministry has asked all those ministries tasked with clearing foreign direct investment (FDI) proposals in the 12 sectors that require government’s nod to take a decision on such proposals within 60 days.
Time duration of 4 weeks has been allotted for All pending applications with the FIPB for transferring to the administrative ministry.
The Standard Operating Procedure (SOP) shall involve the process of inter-ministerial consultation for the examination of FDI proposals.
The SOP will also recognise that ordinarily FDI applications, including those related to non resident Indian (NRI)/ Export Oriented Unit (EOU), food processing, single brand retail trading and multi brand retail trading proposals within 60 days.
Department of Industrial Policy and Promotion (DIPP) will handle the application for import of capital goods or machinery.
A joint quarterly review meeting will be undertaken by a committee co-chaired by DEA and DIPP Secretary on pendency of proposals with Government. All past and future litigations and liabilities shall be handled by the administrative department and about 4,500 reference and record files currently with the FIPB secretariat will be transferred to concerned ministry.
The Department of Economic Affairs (DEA) will be the authority to clear the proposals of financial services not under a regulator, or where there is more than one regulator or there is a doubt about the regulator.
Foreign investment proposals above Rs 5,000 crore would continue to be cleared by the Cabinet Committee on Economic Affairs.
Currently, about 91-95 per cent of FDI is coming through the automatic route and only 11 sectors, including defence and retail trading, require the government approval for FDI. Inflow of foreign direct investment into India increased by 9 per cent to USD 43.48 billion in 2016-17.
The several ministries involved in FDI.
Mining: Mines ministry
Defence: Department of production, Defence ministry
Cases relating to FDI in small arms: Home affairs ministry
Broadcasting: Information and broadcasting ministry
Print Media: Information and broadcasting ministry
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