Foreign funds to be cleared by departments, regulators

Foreign funds to be cleared by departments, regulators

After deciding to abolish the Foreign Investment Promotion Board (FIPB) in the wake of over 92% overseas investments now coming through automatic route, the government on Monday said the remaining investments will be cleared by the departments concerned and sectoral regulators.

“The whole idea was to make doing business in India easier. The logical conclusion was to wind up FIPB, because over 92% of foreign direct investments are coming though the automatic route,” Commerce and Industry Minister Nirmala Sitharaman said.

She said for the remaining 6% to 7%, the ministries or a regulator for the department concerned was sufficient to take care of the investment.

Finance Minister Arun Jaitley had in the Budget 2017-18 announced abolishing FIPB. After that the government said it hoped to put in place a new mechanism to replace FIPB soon.
FIPB offers single-window clearance for applications on FDI in India that are under the approval route.

The sectors under automatic route do not require any prior approval and are subject to only sectoral laws. Asked whether line ministries will be enough to take a call on foreign investments not routed automatically, Sitharaman said, “ministries of sectoral heads”.

FIPB’s mandate was to recommend investments of up to Rs 5,000 crore to the finance minister. FDI beyond the cap needed cabinet committee on economic affairs approval.

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