Processing of FDI proposals: What will the new era hold?

The government of India, through a notification dated 5 June, approved the proposal for phasing out of the Foreign Investment Promotion Board (FIPB). Pursuant to the proposal, the task of granting approval for foreign investments under the country’s foreign direct investment (FDI) policy will now be taken care of by the concerned ministries and departments (authorities).

The notification mentioned that the Department of Industrial Policy and Promotion (DIPP) would lay down a standard operating procedure (SOP), to guide the authorities as regards FDI proposals, and that the SOP would involve the process of inter-ministerial consultations.

Accordingly, on 29 June the DIPP unveiled the SOP, detailing the modus operandi to be followed by the authorities. The key feature of the SOP is the strict and short timelines involved at each step.

Kanchan Sinha is a partner and Sanya Parmar is an associate at Luthra & Luthra Law Offices. The views expressed here are personal. They are intended for general information purposes and are not a substitute for legal advice.