New Delhi : The government on Tuesday said post the abolition of the FIPB, ministries will have to decide on FDI proposals within 60 days of the application and any rejection will need concurrence of the DIPP.
India had last month 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. In an office memorandum, the Finance Ministry said subsequent to the abolition of the Foreign Investment Promotion Board (FIPB), concerned administrative ministries have been allotted the work of granting approval for foreign investment in the specific sector.
The Industry Ministry, in consultation with the administrative ministry, will come out with a detailed guideline for processing of the FDI proposals and ensure a ‘consistency of treatment and uniformity of approach’, reports PTI.
The Standard Operating Procedure (SOP) shall involve the process of inter-ministerial consultation for the examination of FDI proposals, wherever necessary, it said. “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, should be decided in 60 days,” the office memorandum said.
All pending applications with the FIPB would be transferred to the administrative ministry and oversight of the FIPB portal shall be transferred to the DIPP from the Department of Economic Affairs (DEA) within four weeks.
While FDI approval decisions in majority of the sectors have been relegated to concerned ministry, those relating to private security agencies would be decided by the Home Ministry. The DEA will clear proposals of financial services which are not regulated by a regulator or where there is more than one regulator or there is a doubt about the regulator. Any FDI proposal in banks will be approved by the
Department of Financial Services. “FDI proposals by NRIs/EoUs requiring approval of the government will be dealt with by the Department of Industrial Policy and Promotion (DIPP) and the DIPP will continue to be the administrative ministry for this purpose,” it said. Inflow of foreign direct investment into India increased by 9 per cent to USD 43.48 billion in 2016-17. Foreign investment proposals above Rs 5,000 crore would continue to be cleared by the Cabinet Committee on Economic Affairs.
The FIPB was constituted under the Prime Minister’s Office following economic liberalisation in the early 1990s.