New guidelines in works to speed up FDI approvals
As per the existing SOP issued in 2017, when the Foreign Investment Promotion Board was abolished, 8-10 weeks was time fixed for a decision on the proposals that need approval and 20 documents were to be submitted, seven of which were mandatory.
NEW DELHI: The government of India, eyeing overseas investments, has begun working to revamp the Standard Operating Procedure (SOP) for processing foreign direct investment (FDI) proposals to fast track approvals.
The Department for Promotion of Industry and Internal Trade (DPIIT) is preparing a new set of guidelines to expedite the process for clearances, including security, for investment proposals on the approval route.
“An updated SOP on FDI is in the works with updated timelines and procedures,” said an official.
To ensure timely disposal of FDI proposals, periodic reviews are done by the department and the Cabinet Secretary with other stakeholder ministries.
Officials said an updating of the procedures is required as many changes in the policy have taken place in the last few years such as in sectoral caps.
“It will speed up the FDI that comes through the approval route. The existing SOPs are 3-4 years old and there is a need to make them contemporary,” said another official.
India received $35.37 billion foreign direct investment during April-August 2020, the highest so far for the first five months of a financial year.
The second official quoted earlier said while pendency has reduced, some ministries take time while giving approvals. FDI in sectors such as defence, mining, retail, pharmaceuticals, civil aviation, media and banking requires approval from the respective ministries.
Besides, security clearance from home ministry is needed in investments in broadcasting, telecommunication, satellites - establishment and operation, private security agencies, defence, civil aviation and mining & mineral separation of titanium bearing minerals and ores, its value addition and integrated activities.
The latest norms mandate prior government approval, including security clearance for all FDI coming from India's land-border sharing countries including from China. Over 100 proposals involving investment from China and Hong Kong have been held back for government nod. An inter-ministerial committee headed by the home secretary has been set up vet these proposals.