 "Ease of doing business: Govt to clear FDI proposals in less than 10 weeks")
The move is aimed at improving investment climate of the country. The new mechanism will replace the Foreign Investment Promotion Board (FIPB), abolished by the government.
According to the standard operation procedure (SOP) released by Department of Industrial Policy and Promotion (DIPP) today, proposals not requiring security clearance would be cleared in eight weeks and applications that require security nod would take a cumulative time period of ten weeks.
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Additional time of two weeks will be given to DIPP for consideration of the proposals proposed for rejection or where additional conditions which are not provided in the FDI policy are proposed to be imposed by the competent authority.
The FDI proposals requiring government's nod will have to be vetted by the concerned ministries or departments.
Proposals for foreign investment in sectors/activities requiring government approval would be filed online on the revamped FIPB portal, rechristened as "Foreign Investment Facilitation Portal (FIFP)".
After the proposals are filed online, the DIPP will identify the concerned ministry or department and e-transfer those applications within two days.
If a company submits a digitally signed application, it is not required to submit any physical copy.
"Calculation of time limits for disposal of applications would be with reference to the date of filing of online application," the DIPP said.
Explaining the procedure for processing the applications, it said competent authorities would not replicate an inter- ministerial body in respective ministries to grant approvals.
"New regime for foreign investment needs to be simpler in execution and expeditious in disposal," it added.
Once the proposal is received, same would be circulated online within two days by the DIPP to the RBI for comments from FEMA perspective.
FDI applications which require security clearances include investments in broadcasting, telecommunication, satellites, private security agencies, defence, civil aviation and mining & mineral separation of titanium bearing minerals and ores.
Investments from Pakistan and Bangladesh also need security approvals.
The SOP has even fixed timeliness for ministries to upload their comments on the portal and scrutinisation of the proposals and documents.
Competent authorities will hold a regular monthly review on the foreign investment proposals pending with them.
Besides, joint quarterly review meeting will be held under the co-chairmanship of the secretary, DIPP and economic affairs secretary on pendency of proposals with government.
Foreign investments in bulk of the sectors are allowed under the automatic route. Currently, only 11 sectors, including defence and retail trading, require government approval for FDI.