India Plans FDI Policy Changes To Boost Investment & Ease Business Norms

New Delhi, Aug 9: The government is considering a proposal to raise the threshold for foreign direct investment proposals requiring approval from the Cabinet Committee on Economic Affairs to Rs 15,000 crore from Rs 5,000 crore at present to further improve the country's investment climate, according to sources.

The Cabinet Committee on Economic Affairs (CCEA) is a high-level committee headed by Prime Minister Narendra Modi. Its members include key Union Cabinet ministers such as the Home Minister and Finance Minister.

As per the existing foreign direct investment (FDI) policy, in case of proposals involving total foreign equity inflow of more than Rs 5,000 crore, the competent authority places the application for consideration of the CCEA. Below this limit, respective line ministries take a decision.

The existing limit has remained unchanged since November 2015.

Sources said that prevailing economic conditions, inflation, the growing scale of investments over the years, and the objective of promoting ease of doing business necessitate a review of the existing threshold.

Earlier, a committee of secretaries, in its meeting, also suggested upward revision of the CCEA approval limit for FDI proposals requiring the government approval route.

The proposal is at a discussion stage, they said.

The government is also considering a proposal to ease FDI norms for downstream investments to boost overseas fund inflows and create jobs.

As per the proposal, the government is considering exempting indirect foreign investment in Indian companies from obtaining its fresh nod where the upstream domestic firm has already received such approval.

At present, prior government approval is required for downstream or indirect foreign investment in two cases -- sectors under the government approval route for FDI and investments from countries sharing a land border with India.

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The government has taken a series of steps to attract overseas inflows. The investments have crossed USD 1.16 trillion during April 2000 and March 2026.

The top ten investors include Mauritius, Singapore, the US, the Netherlands, Japan, the UK and the UAE.

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