Govt approves abolition of Foreign Investment Promotion Board

5/26/2017
  • The Union Cabinet chaired by the Prime Minister Shri Narendra Modi has given its approval to the phasing out of Foreign Investment Promotion Board (FIPB).
  • The proposal entails abolishing the FIPB and allowing administrative Ministries/Departments to process applications for FDI requiring government approval.
  • Henceforth, the work relating to processing of applications for FDI and approval of the Government thereon under the extant FDI Policy and FEMA, shall now be handled by the concerned Ministries/Departments in consultation with the Department of Industrial Policy & Promotion(DIPP), Ministry of Commerce, which will also issue the Standard Operating Procedure (SOP) for processing of applications and decision of the Government under the extant FDI policy.
  • In addition, Foreign Investors will find India more attractive destination and this will result in more inflow of FDI. The move will provide ease of doing business and will help in promoting the principle of Maximum Governance and Minimum Government.
  • Currently around 91-95% of FDI inflow happens through the automatic route, adding that there are only 11 sectors (including defence and retail) needing government approval.
  • The FIPB was initially set up under the Prime Minister's Office following the economic liberalization in the early 1990s.
  • It shifted under the DIPP in 1996, and then in 2003 to the department of economic affairs in the finance ministry.
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