{"id":3974,"date":"2017-06-13T14:57:20","date_gmt":"2017-06-13T09:27:20","guid":{"rendered":"https:\/\/taxclick.org\/?p=3974"},"modified":"2017-06-13T14:59:49","modified_gmt":"2017-06-13T09:29:49","slug":"end-foreign-investment-promotion-board-maximum-governence-minimum-goverment","status":"publish","type":"post","link":"https:\/\/taxclick.org\/type\/fema\/end-foreign-investment-promotion-board-maximum-governence-minimum-goverment\/","title":{"rendered":"End of Foreign Investment Promotion Board – Maximum Governance minimum Government"},"content":{"rendered":"

India has a very well formulated Foreign Direct Investment (FDI) policy. FDI is channeled into India subjected to entry regulations. FDI entry can be made under two categories \u2013 Approval route<\/em> and Automatic route.<\/em> The FDI Policy, Press Notes and other related notified guidelines formulated by Department of Industrial Policy and Promotion (DIPP) in the Ministry of Commerce and Industry and Reserve Bank of India are the bases of the FDI investments in India.For evaluating proposals under approval route the government formulated the Foreign Investment Promotion Board (FIPB). FDI proposals above Rs.5000 crore are taken care of by the Cabinet Committee on Economic Affairs (CCEA).<\/span><\/p>\n

\"\"<\/a><\/span><\/p>\n

The Foreign Investment Promotion Board (FIPB), housed in the Department of Economic Affairs, Ministry of Finance, an inter-ministerial body, has been responsible for processing of Foreign Direct Investment (FDI) proposals and making recommendations for Government approval. FIPB has been the single window for allowing foreign direct investments (FDI) that falls under approval route since 1990s.<\/span><\/p>\n

Finance Minister Mr. Arun Jaitley had announced in his budget speech in the Union Budget for the financial year 2017-18 that the FIPB would be dismantled. He said \u201cWe have now reached a stage where the FIPB can be phased out. We have decided to abolish it in 2017-18\u201d. <\/em><\/span><\/p>\n

The FIPB\u2019s powers had been systematically depleted under the current regime of government. For example, in June 2016, the government had announced relaxed FDI norms in single-brand retail, civil aviation, airports, pharmaceuticals, animal husbandry and food products.<\/span><\/p>\n

As a further bold step towards ‘Maximum Governance and Minimum Government’ FIPB has been abolished by the government with effect from 5th June, 2017. 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\/Department. 7. ln February 2015, Government had launched a new<\/span><\/p>\n

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<\/span><\/p>\n

portal from where they can download and process their respective applications.<\/span><\/p>\n

In result of the abolishment, the 11 notified sectors will be granted approval by their respective ministries\/departments.<\/span><\/p>\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
Sr. No.<\/strong><\/span><\/td>\nSector\/Activity<\/strong><\/span><\/td>\nAdministrative Department\/ Ministry<\/strong><\/span><\/td>\n<\/tr>\n
1.<\/span><\/td>\nMining<\/span><\/td>\nMinistry of Mines<\/span><\/td>\n<\/tr>\n
2.<\/span><\/td>\nDefence<\/span><\/td>\nDepartment of Defence Production, Ministry of Defence<\/span><\/td>\n<\/tr>\n
2A.<\/span><\/td>\nFDI\u00a0 in small arms<\/span><\/td>\nMinistry of Home affairs<\/span><\/td>\n<\/tr>\n
3.<\/span><\/td>\nBroadcasting<\/span><\/td>\nMinistry of Information and Broadcasting<\/span><\/td>\n<\/tr>\n
4.<\/span><\/td>\nPrint media<\/span><\/td>\nMinistry of Information and Broadcasting<\/span><\/td>\n<\/tr>\n
5.<\/span><\/td>\nCivil aviation<\/span><\/td>\nMinistry of Civil Aviation<\/span><\/td>\n<\/tr>\n
6.<\/span><\/td>\nSatellites<\/span><\/td>\nDepartment of Space<\/span><\/td>\n<\/tr>\n
7.<\/span><\/td>\nTelecom<\/span><\/td>\nDepartment of Telecommunications, Ministry of Communications<\/span><\/td>\n<\/tr>\n
8.<\/span><\/td>\nPrivate security agencies<\/span><\/td>\nMinistry of Home Affairs<\/span><\/td>\n<\/tr>\n
9.<\/span><\/td>\nTrading (single & multi brand and food products retail trading)<\/span><\/td>\nDepartment of Industrial policy & Promotion, Ministry of Commerce and Industry<\/span><\/td>\n<\/tr>\n
10A.<\/span><\/td>\nFinancial services not regulated by a regulator or where there is more than one regulator in respect of which there is a doubt about the regulator (As per FDI policy)<\/span><\/td>\nDepartment of Economic Affairs, Ministry of Finance<\/span><\/td>\n<\/tr>\n
10B.<\/span><\/td>\nBanking (Public and Private) (As per FDI policy)<\/span><\/td>\nDepartment of Financial Services, Ministry of Finance<\/span><\/td>\n<\/tr>\n
11.<\/span><\/td>\nPharmaceuticals<\/span><\/td>\nDepartment of Pharmaceuticals, Ministry of Chemicals and Fertilizers<\/span><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

\u00a0<\/strong><\/span><\/p>\n

With the abolishment of FIPB, the functional and regulatory responsibilities in relation to the applications requiring approval of the government are transferred to DIPP or the concerned Administrative Ministry\/Department as the case may be.<\/span><\/p>\n

The following lists of applications requiring the approval of the government along with the concerned ministry having authority to deal with the proposals are as under: –<\/span><\/p>\n\n\n\n\n\n\n\n\n\n
Sr. No.<\/strong><\/span><\/td>\nSector\/Activity<\/strong><\/span><\/td>\nAdministrative Department\/Ministry<\/strong><\/span><\/td>\n<\/tr>\n
1.<\/span><\/td>\nFDI proposals by NRI\/Export oriented units (EOU) requiring prior approval of the government<\/span><\/td>\nDIPP<\/span><\/td>\n<\/tr>\n
2.<\/span><\/td>\nApplications relating to issue of equity shares under the Government route for import of capital goods \/machinery\/equipment (excluding second hand machinery)<\/span><\/td>\nDIPP<\/span><\/td>\n<\/tr>\n
3.<\/span><\/td>\nApplications relating to issue of equity shares for pre-operative \/pre-incorporation expenses<\/span><\/td>\nDIPP<\/span><\/td>\n<\/tr>\n
4.<\/span><\/td>\n\n

Applications of investments from Countries of Concern, requiring clearance under the current FEMA Act.<\/span><\/p>\n

(Investments falling under automatic route)<\/span><\/td>\n

Ministry of Home Affairs<\/span><\/td>\n<\/tr>\n
5.<\/span><\/td>\n\n

Applications of investments from Countries of Concern, requiring clearance under the current FEMA Act.<\/span><\/p>\n

(Investments falling under approval route)<\/span><\/td>\n

Nodal administrative ministries\/ departments in consultation with Ministry of Home Affairs<\/span><\/td>\n<\/tr>\n
6.<\/span><\/td>\nApplication of FDI into core investment company of an Indian company engaged only into investing capital in other Indian companies<\/span><\/td>\nDEA, Ministry of Finance<\/span><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

\u00a0<\/strong><\/span><\/p>\n