The abolition of the Foreign Investment Promotion Board (FIPB) approved

1. The proposal for abolition of the Foreign Investment Promotion Board (FIPB) has been approved by the Government.

2. The proposal, as approved by the Government, envisages the following:

2.1  Subsequent to the abolition of the FIPB, the work of granting government approval for foreign investment under the extant FDI Policy and FEMA Regulations, shall be entrusted to the concerned Administrative Ministries/Departments. The eleven notified sectors/activities requiring government approval with the concerned Administrative Ministry/ Department are listed below:

2.2. FDI proposals by Non Resident Indians (NRI)/ Export Oriented Unit’s (EOU’s) requiring approval of the Government will be dealt with by DIPP and the DIPP will continue to be the administrative ministry for this purpose.

2.3. Applications relating to issue of equity shares under the FDI policy under the Government route for import of capital goods/ machinery/ equipment (excluding second-hand machinery) shall be handled by the DIPP.

2.4. Applications relating to issue of equity shares for pre‑

operative/pre-incorporation expenses (including payments of rent etc.) shall be processed by the DIPP.

2.5. Applications involving investments from Countries of Concern, requiring security clearance as per the extant FEMA 20, FDI Policy and security guidelines, amended from time to time, shall be processed by the Ministry of Home Affairs. It is further clarified that only such investments falling under automatic route sectors/activities requiring security clearance may be processed by Ministry of Home Affairs itself while cases pertaining to other approval route sectors/activities requiring security clearance may be processed by the nodal Administrative Ministries/Departments in consultation with the Ministry of Home Affairs, as the case may be.

2.6. Applications for foreign investment into a Core Investment Company or an Indian company engaged only in the activity of investing in the capital of other Indian Company/ies shall be processed by the Department of Economic Affairs, Ministry of Finance irrespective of the sector in which the investment is being made.

2.7. In respect of the applications in which there is a doubt about the Administrative Ministry concerned, the DIPP shall identify the Administrative Ministry/Department where the application will be processed.

2.8. The applications requiring approval of the Government shall continue to be received by the existing FIPB portal, the oversight of which shall be transferred to the DIPP from the DEA within four weeks.

2.9. Upon receipt of the FDI application, the concerned administrative Ministry/Department shall process the said application. Towards that end, a Standard Operating Procedure (SOP) with detailed guidelines shall be developed and laid down by the DIPP in consultation with Administrative Ministries/Departments/sector regulators so as to guide the Administrative Ministries/Departments for processing of the FDI proposals and ensure a consistency of treatment and uniformity of approach across sectors. The SOP shall involve the process of Inter-Ministerial consultations for the examination of FDI proposals, where necessary. The SOP will also recognize that ordinarily FDI applications, including those related to Non Resident Indian (NRI)/ Export Oriented Unit (EOU), food processing, Single Brand Retail Trading (SBRT) and Multi Brand Retail Trading (MBRT) proposals, should be decided in sixty days.

2.10. The Administrative Ministry/ Department will seek the approval of the Minister-in-charge / Cabinet Committee on Economic Affairs (CCEA) on the application as per the existing FDI Policy.

2.11. The concurrence of DIPP would be mandatory with reference to the FDI applications which are proposed to be rejected by the competent authority or where approval is proposed by competent authority subject to additional conditions not provided in the FDI policy.

2.12. The monitoring of the compliance of conditions under the FDI approvals, including the past cases approved by FIPB, shall be done by the concerned Administrative Ministries/Department.

2.13. Joint quarterly review meeting will be undertaken by a Committee co-chaired by Secretary, DEA and the Secretary, DIPP on pendency of proposals with Government. The Secretary of the concerned Administrative Ministry/Department may also be invited to attend the meeting.

2.14. There are about 4,500 files currently with the FIPB Secretariat. These files are important from the point of view of reference, record, examination by investigating agencies, etc. These files are permanent in nature and shall be transferred to the concerned Ministry/Department by the FIPB Secretariat.

2.15. All past, present and future litigations and liabilities, in various courts and adjudicatory forums in relation to the approvals of the Governments shall be handled by the respective administrative Ministry/Department. An affidavit to this effect will be filed accordingly in all such pending and ongoing cases.

2.16. RTI applications and appeals pending with the FIPB Secretariat shall be transferred to the respective administrative Ministry/Department.

2.17. In February 2015, Government had launched a new user friendly and secured website i.e. fipb.gov.in. Since then, all applications for seeking approval of the Government are being filed through this online portal. Subsequent to abolition of the FIPB, the management and responsibility for running the website shall be that of the DIPP. The administrative Ministries/Departments shall be granted access to the online portal from where they can download and process their respective applications.

2.18. All applications pending with the FIPB portal as on the date of abolition of FIPB shall be transferred to the respective Administrative Ministry/Department by the DIPP immediately upon receipt thereof.

3. All the Ministries/Departments are requested accordingly to ensure necessary action at their end.

Signed by Signed by 
(Saurabh Garg) 
Joint Secretary to the Government of India

UPDATE: Standard Operating Procedure (SOP) for Processing FDI Proposals (29th of June, 2017)