The commerce and industry ministry will soon come out with the standard operating procedure (SOP) for clearance of foreign investments proposals as the government has abolished the FIPB. The Department of Industrial Policy and Promotion (DIPP) has prepared a draft SOP and is circulating it to different departments including the economic affairs for their views. “Within seven to ten days, we will release the procedure. Now the FIPB portal would be linked with the e-biz portal. We have set timelines for all the steps such as number of days for sending comments and giving security clearance,” a senior ministry official said.
Last month, India scrapped the 25-year old Foreign Investment Promotion Board (FIPB) as it looks to attract more FDI by providing quick approvals under a single-window clearance system. The finance ministry had recently stated that the DIPP, in consultation with the administrative ministry, would come out with detailed guidelines for processing of the FDI proposals and ensuring a consistency of treatment and uniformity of approach. It also said that FDI proposals would be cleared within 60 days of the application.
While FDI approval decisions in majority of the sectors have been relegated to concerned ministries, those relating to private security agencies would be decided by the Ministry of Home Affairs. The Department of Economic Affairs (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 proposal in banks will be looked by the Department of Financial Services.
A joint quarterly review meeting will be undertaken by a committee co-chaired by the DEA and DIPP Secretary on pendency of proposals with the government. 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.