Following the abolition of the Foreign Investment Promotion Board (FIPB), the finance ministry has said that concerned administrative ministries and departments will have to decide on foreign direct investment (FDI) proposals in specific sectors within 60 days of the application. It also said that any rejection will need the department of industrial policy and promotion’s (DIPP) concurrence. Last month, Union Cabinet had scrapped the 25-year-old FIPB to attract more FDI by providing quick approvals under a single-window clearance system.
The ministry has said that the Industry Ministry, in consultation with the administrative ministry, would come out with a detailed guideline for processing of the FDI proposals and ensure a consistency of treatment and uniformity of approach. For the examination of FDI proposals, it also said that the Standard Operating Procedure (SOP) shall involve the process of inter-ministerial consultation, wherever required. It added that the SOP will also recognize 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.
It further said that 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. It noted that while FDI approvals in most sectors have been relegated to the ministries concerned, those relating to private security agencies would be decided by the home ministry. It also explained that the DEA would clear proposals of financial services not under a regulator, or where there is more than one regulator or there is a doubt about the regulator.