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Home News News and Press Release Month 5 2015 2015 (5) This
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Review of the investment limit for cases requiring prior approval of the Foreign Investment Promotion Board (FIPB)

May 7, 2015
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The Cabinet Committee on Economic Affairs, chaired by the Prime Minister Shri Narendra Modi, has approved the proposal of Department of Industrial Policy & Promotion to review of the investment limit for cases requiring prior approval of the Foreign Investment Promotion Board (FIPB) / Cabinet Committee on Economic Affairs (CCEA), as provided in the Consolidated FDI Policy Circular effective from April 17, 2014. Amended provisions in this regard are as under:

 (a) The Minister of Finance who is in-charge of FIPB would consider the recommendations of FIPB on proposals with total foreign equity inflow up to ₹ 3000 crore.

 (b) Recommendations of FIPB on proposals with total foreign equity inflow of more than ₹ 3000 crore would be placed for consideration of CCEA.

 (c) The CCEA would also consider the proposals which may be referred to it by the FIPB / the Minister of Finance (in-charge of FIPB).

 (d) The FIPB Secretariat in the Department of Economic Affairs (DEA) will process the recommendations of FIPB to obtain the approval of Minister of Finance and the CCEA.

 This decision is expected to expedite the approval process and result in increased foreign investment inflows.

 Background:

 Liberalisation of the FDI policy has been done in a calibrated manner. Most of the sectors are presently under the automatic route, under which, only intimation is required to be given to the Reserve Bank of India (RBI) and approval of the FIPB/CCEA is not required. No limit for foreign investment has been prescribed for the automatic route. However, approval route cases are decided by the FIPB, only if the investment is less than ₹ 2000 crore.

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