FDI proposals requiring prior government approval will now be processed within 60 days, with ministries having to approve/reject all such applications within that agreed timeframe. This applies to all of the 12 sectors where overseas investment still requires authorisation from a relevant ministry – retailing; pharmaceuticals; banking; telecommunications; broadcast media; print media; civil aviation; mining; defence; small arms; satellites; and certain financial services (including those that are unregulated or where there is more than one regulator). In an additional move, the Department of Industrial Policy and Promotion (DIPP) has announced plans to issue standard operating procedures for the approval of FDI proposals.
While no date has been announced for the adoption of these procedures, the move comes in the wake of the scrapping the body previously responsible for the processing of FDI applications, the Foreign Investment Promotion Board (FIPB), back in May of this year. With the country’s Foreign Investment Promotion Board (FIPB) now set to be scrapped, all future FDI proposals requiring prior government approval will be solely handled by the relevant ministries. The move comes following news that 90% of all FDI proposals made over the last three years were automatically approved under the Indian government’s liberalised investment regime. Further relaxation of this regime is expected in the coming months. In June 2016, the Indian government liberalised the FDI rules applying to several key sectors, including civil aviation, defence, single brand retail, pharmaceuticals and food products. For further details