The Union Cabinet chaired by the Prime Minister 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 and
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. The DIPP 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
The proposal for abolition of FIPB was approved by the Cabinet in its
meeting on May 24. Presently, applications are considered by FIPB in Department
of Economic Affairs (DEA), Ministry of Finance comprising of various
Secretaries of Government of India for making recommendation on FDI
applications. After the Cabinet decision, it would be handled independently by
Administrative Ministries as per Sector.