More steel in FIPB's teeth, can clear FDI upto Rs 1200 cr

CCEA modifies policy on FDI approval

GN Bureau | February 11, 2010

The Cabinet Committee on Economic Affairs (CCEA) today allowed the Foreign Investment Promotion Board (FIPB) to approve projects involving FDI inflow of Rs 1200 crore. Projects bigger than would now require CCEA's approval.

Presently, the recommendations of FIPB on proposals with total project cost up to Rs 600 crore are approved by the Finance Minister and proposals involving total project cost more than Rs 600 crore are  put up to the Cabinet Committee on Economic Affairs.  Further, presently the total project cost, including the foreign equity inflow, is taken into consideration in deciding whether the proposal is to be put up for consideration of CCEA. 

With today’s approval, only proposals involving total foreign equity inflow of more than Rs 1200 crore would be placed for consideration of CCEA. The recommendations of FIPB on proposals with total foreign equity inflow of and below Rs 1200 crore will be considered by the Finance Minister for approval.

Further, it has been decided that the cases where prior approval of FIPB/CCEA for making the initial foreign investment was taken, then the following types of cases would not require to  approach FIPB/Government for fresh approval:

  • Cases of entities whose activities had earlier required prior approval of FIPB/CCFI/CCEA and who had, accordingly, earlier obtained prior approval of FIPB/CCFI/CCEA for their initial foreign investment but subsequently such activities/sectors have been placed under automatic route;


  • Cases of entities whose activities had sectoral caps earlier and who had, accordingly, earlier obtained prior approval of FIPB/CCFI/CCEA for their initial foreign investment but subsequently such caps were removed or increased and the activity placed under the automatic route;


  • Cases where prior approval of FIPB/CCFI/CCEA had been obtained with reference to activities/sectors requiring such approval and also from the angle of provisions of Press Note 18/1998 or Press Note 1 of 2005.

With the government’s further liberalization, the approval  is expected to save time and efforts for the FIPB/CCEA and also expedite foreign investment inflow.



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