DIPP working on aligning FDI policy with NIC code

The government is working on a proposal to indicate applicability of Foreign Direct Investment (FDI) policy against each entry in National Industrial Classification (NIC) code, with a view to improve the ease of doing business. The Department of Industrial Policy and Promotion (DIPP) has prepared a draft list in this regard and it has sought comments and suggestions from the stakeholders and investors on this latest by November 20.

In order to provide greater clarity and simplicity to foreign investors, DIPP has initiated an exercise for preparation of identifying applicability of the FDI policy para as per each identified activity provided in NIC Code 2008. Under this exercise, the codification had been started off with the NIC-2008 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. The DIPP, which is under the Ministry of Commerce and Industry, is the nodal agency on FDI policy. It compiles all policies related to India's FDI regime into a single document to make it simple and easy for investors to understand.

The code will classify business activities and help the industry in seeking policy approvals for specific activities. All the economic activities are classified as per the NIC Code. The classification is necessary for seeking industrial licenses and submitting industrial entrepreneurs memorandum.

According to the World Bank report 'Doing Business 2016', India now ranks 130th out of 189 countries in the ease of doing business, moving up 12 places from last year.