Govt overhauls FDI approval procedures; issues new SoP with timelines for each stage of approval

By Subhash Narayan New Delhi, Nov 19 : The government made major changes in Foreign Direct Investment (FDI) regime with the focus on simplification of procedures and administration rather than a tweak in the investment caps.
Accordingly, the Department for Promotion of Industry and Internal Trade (DPIIT) has come out with fresh set of standard operating procedures for processing FDI proposals that makes online furnishing of investment proposals and clearance by the respective authorities mandatory and within a specified period of time.
In line with changes brought about in the functioning by the outbreak of the pandemic, digitally signed applications and documents by an applicant will be accepted without any human interface. In case this is not available, additional seven days time would be given to the applicant to furnish physical copies of the document for further processing of the FDI proposal.
Under the new FDI approval plan, timelines for each stage of clearance has been defined with final clearance of FDI proposals being given in 10 weeks from the day it is received by DPIIT in cases where no security clearance is required. FDI proposals needing security clearance will have to be cleared by taking additional two weeks time in 12 weeks from the application date.
Government has also decided to assign FDI proposals coming in the domain of respective ministries to them for clearance. Such ministries, which will be called competent authority, will have a free hand to examine the proposals and clear them in a time-bound manner.
To smoothen the process, commerce and industry ministry has advised administrative ministries not to set up inter-ministerial groups to clear FDI proposals but rather assign it to an identified group of people for clearance within the ministry. This has been done to save time with the focus remaining with a specific group within the ministry.