Fast Track Clearance of FDI Proposals

A Standard Operating Procedure (SOP) has been issued on 29th June, 2017 for processing Foreign Direct Investment (FDI) proposals by Department for Promotion of Industry & Internal Trade (DPIIT) (earlier known as Department of Industrial Policy & Promotion) which is available on the website: fifp.gov.in. As per the SOP, 8 to 10 weeks’ time has been fixed for decision on the proposals, excluding the time taken by applicants in removing deficiencies in the proposals/supplying additional information as may be required by the competent authority. Further, to ensure timely disposal of FDI proposals, periodic review is undertaken by DPIIT with other stakeholder Ministries/Departments.

The number of FDI proposals received under Government approval route in the last three years and in the current year, upto June, 2019 is as under:

It may be noted that, in the extant FDI Policy, except for a small negative list, most sectors are open for 100% FDI under automatic route. In the financial year 2018-19, 94.53% FDI equity inflow was received under automatic route. Further, the FDI inflows have been consistently rising each year which can be seen from the table below:

  NOTE: Figures are provisional subject to reconciliation with RBI

To promote FDI, the Government has put in place an investor-friendly policy, wherein except for a small negative list, most sectors are open for 100% FDI under the automatic route. Further, the policy on FDI is reviewed on an ongoing basis, to ensure that India remains attractive & investor friendly destination. Changes are made in the policy after having consultations with stakeholders including apex industry chambers, associations, representatives of industries/groups and other organizations taking into consideration their views/comments. However, FDI is largely a matter of private business decisions. FDI inflows depend on a host of factors such as availability of natural resource, market size, infrastructure and general investment climate as well as macro-economic stability and investment decision of foreign investors.

This information was given by the Minister of Commerce and Industry, Piyush Goyal, in a written reply in the Rajya Sabha today.