In order to promote ease of doing business for overseas investors, the government is working to align the FDI policy with the National Industrial Classification (NIC) code. As there is lack of clarity with regard to the code and the FDI policy, the Department of Industrial Policy and Promotion (DIPP) has asked the Department of Economic Affairs to examine the draft on mapping of NIC code prepared by it.
To provide greater clarity and simplicity to foreign investors, the Commerce and Industry Ministry has said that Aligning NIC code with the FDI policy will smoothen implementability of the liberalized FDI policy regime. It will also remove ambiguity in the interpretation of NIC code and its linkage with the policy. The DIPP which is the nodal agency on FDI policy is working on this issue as it needs to be done with utmost caution.
As per the exercise, codification would be done with the NIC code book indicating against each entry as to whether FDI is allowed therein, and if so, it is on automatic or approval route along with para number of FDI policy. After finalising the draft, the ministry is expected to seek Cabinet’s approval on the same. All the economic activities are classified as per the NIC code. The classification is necessary for seeking industrial licences and submitting industrial entrepreneurs’ memorandum.