Foreign
Investment Promotion Board (“FIPB”)
was set up in early 1990s to consider the foreign direct investment (“FDI”) proposals requiring government approval.
FIPB, housed in the Department of Economic Affairs (“DEA”), Ministry of Finance, offered a single window clearance
system for disposing off the FDI applications falling under the approval route
in India.
Investment Promotion Board (“FIPB”)
was set up in early 1990s to consider the foreign direct investment (“FDI”) proposals requiring government approval.
FIPB, housed in the Department of Economic Affairs (“DEA”), Ministry of Finance, offered a single window clearance
system for disposing off the FDI applications falling under the approval route
in India.
Abolition
of FIPB was proposed in the budget of 2017-18 in light of the following
circumstances and the proposal was finally approved by the government on May
24, 2017:
of FIPB was proposed in the budget of 2017-18 in light of the following
circumstances and the proposal was finally approved by the government on May
24, 2017:
i.
More
than 90% of the foreign direct investments were under the automatic route; and
More
than 90% of the foreign direct investments were under the automatic route; and
ii.
Reduction
in number of sectors requiring government approval. A total of 11 sectors under
the approval route have been notified in this regard.
Reduction
in number of sectors requiring government approval. A total of 11 sectors under
the approval route have been notified in this regard.
Subsequent
to the abolition of FIPB:
to the abolition of FIPB:
1. The
administrative ministries/departments will be entrusted with the responsibility
of dealing with:
administrative ministries/departments will be entrusted with the responsibility
of dealing with:
(a) the
foreign direct investment proposals requiring government approval;
foreign direct investment proposals requiring government approval;
(b) monitoring
of compliance of conditions subject to which such approvals would have been
granted;
of compliance of conditions subject to which such approvals would have been
granted;
(c) RTI
applications and appeals pending with the FIPB Secretariat; and
applications and appeals pending with the FIPB Secretariat; and
(d) all
the past, present and future litigations and liabilities, in various courts and
adjudicatory forums. An affidavit to this effect will be filed in all such
pending and ongoing cases.
the past, present and future litigations and liabilities, in various courts and
adjudicatory forums. An affidavit to this effect will be filed in all such
pending and ongoing cases.
2. Department of Industrial Policy
and Promotion (“DIPP”) will majorly be
responsible for the following:
and Promotion (“DIPP”) will majorly be
responsible for the following:
(a)
FDI
by non-resident investors (“NRIs”)
and export oriented units (“EOUs”);
FDI
by non-resident investors (“NRIs”)
and export oriented units (“EOUs”);
(b) applications
relating to issue of equity shares for import of capital
goods/machinery/equipment;
relating to issue of equity shares for import of capital
goods/machinery/equipment;
(c)
applications
for issue of equity shares against pre-incorporation expenses;
applications
for issue of equity shares against pre-incorporation expenses;
(d) identification
of administrative ministry/department in case there is a doubt about the
administrative ministry/department concerned;
of administrative ministry/department in case there is a doubt about the
administrative ministry/department concerned;
(e) oversight
of FIPB portal; and
of FIPB portal; and
(f) development
of a standard operating procedure with detailed guidelines ensuring uniformity
of approach across sectors in consultation with the administrative
ministries/department.
of a standard operating procedure with detailed guidelines ensuring uniformity
of approach across sectors in consultation with the administrative
ministries/department.
3.
Applications
involving investments from countries of concern would require approval from the
Ministry of Home Affairs;
Applications
involving investments from countries of concern would require approval from the
Ministry of Home Affairs;
4.
Foreign
investments into core investment companies or investment companies engaged in
investment in capital of Indian companies will be processed by DEA,
irrespective of the sector in which the investment is made;
Foreign
investments into core investment companies or investment companies engaged in
investment in capital of Indian companies will be processed by DEA,
irrespective of the sector in which the investment is made;
5.
Any
decision of a competent authority to reject or subject an application to
conditions not provided in the FDI policy, would require the consent of DIPP;
Any
decision of a competent authority to reject or subject an application to
conditions not provided in the FDI policy, would require the consent of DIPP;
6.
During
the transition period, the Secretary, DEA and the Secretary DIPP will meet
quarterly to discuss the pendency of proposals with the government.
During
the transition period, the Secretary, DEA and the Secretary DIPP will meet
quarterly to discuss the pendency of proposals with the government.
7. Procedurally:
(a)
The
control of FIPB portal will be transferred by DEA to DIPP within four weeks;
The
control of FIPB portal will be transferred by DEA to DIPP within four weeks;
(b)
All
the pending cases on FIPB portal will be transferred to the respective
administrative ministry/department by DIPP;
All
the pending cases on FIPB portal will be transferred to the respective
administrative ministry/department by DIPP;
(c)
The
aforesaid administrative ministry/department will be given an access to the
FIPB portal for processing the applications pending before them;
The
aforesaid administrative ministry/department will be given an access to the
FIPB portal for processing the applications pending before them;
(d)
The
administrative ministry/ department will seek the approval of the
Minister-in-charge / Cabinet Committee on Economic Affairs (CCEA);
The
administrative ministry/ department will seek the approval of the
Minister-in-charge / Cabinet Committee on Economic Affairs (CCEA);
(e) Ordinarily FDI applications,
including those related to NRls, EOUs, food processing, single and multi brand
retail trading, should be decided in sixty days.
including those related to NRls, EOUs, food processing, single and multi brand
retail trading, should be decided in sixty days.
