1. The Government is committed to promoting accelerated growth in the industrial sector. The role of foreign direct investment (FDI) as a means to support domestic investment for achieving a high level of economic development is well recognised. Increasing the level of inflow of FDI into the country is one of the main objectives of the Government's economic development strategy. In order to achieve this goal, the Government is also committed to putting in place appropriate institutional arrangements and transparent rules, procedures and guidelines for investment promotion and for considering and approving the proposals for FDI. Accordingly, the Government have decided to reconstitute the Foreign Investment Promotion Board (FIPB). The Board will comprise the core group of secretaries to Government and would have the following composition :-
i) Industry Secretary - Chairman, (Secretary Department of Industrial Policy and Promotion), Government of India.
ii) Finance Secretary, Government of India.
iii) Commerce Secretary, Government of India.
iv) Secretary (Economic Relations), Ministry of External Affairs, Government of India.
The Board may coopt other Secretaries to the Government of India and top officials of financial institutions, banks and professional experts of Industry and Commerce, as and when necessary.
2. The objective, functions and procedures of the Board will be as detailed below:
Objective
3. The objective of the Board will be to promote the inflow of foreign direct investment (FDI) into India - (i) by undertaking investment promotion activities, and (ii) through facilitating investment in the country by international companies, non-resident Indians (NRIs) and other foreign investors in projects which are considered to be of benefit to the Indian economy but do not qualify for automatic approval by the Reserve Bank of India (RBI) and/or are outside the parameters of the existing policy for clearance of investment proposals. The Board shall consider all investment proposals with or without technical collaboration and/or industrial licence.
Functions
4. The main functions of the Board will be as follows:
i) to ensure expeditious clearance of the proposals for foreign investment;
ii) to review periodically the implementation of the proposals cleared by the Board;
iii) to review, on a continuous basis, the general and sectoral policy regimes relating to FDI and in consultation with the Administrative Ministries and other concerned agencies, evolve a set of transparent guidelines for facilitating foreign investment in various sectors;
iv) to undertake investment promotion activities including establishment of contact with and inviting selected international companies to invest in India in the appropriate projects;
v) to interact with the Industry Association/Bodies and other concerned government and non-government agencies on relevant issues in order to facilitate increased inflow of FDI;
vi) to identify sectors into which investment may be sought keeping in view the national priorities and also the specific regions of the world from which investment may be invited through special efforts;
vii) to interact with the Foreign Investment Promotion Council (FIPC) being constituted seperately in the Ministry of Industry; and
viii) to undertake all other activities for promoting and facilitating foreign direct investment, as considered necessary from time to time.
The Board will submit its recommendations to the Government for suitable action.
Procedures
5. The FIPB should meet on a fixed day every week to ensure quick disposal of the cases and may have more frequent meetings whenever considered necessary.
6. Foreign investment proposals received by the Board's secretariat should be put up to the Board within 15 days of receipt and the Administrative Ministries must offer their comments either prior to and/or in the meeting of the FIPB.
7. It should be the endeavour of FIPB to ensure that, as far as possible the Government's decisons on FDI proposal is communicated to the applicant within six weeks.
8. The Board shall have the flexibility of purposeful negotiation with the investors and consider project - proposals in totality, free from parameters, in order to ensure maximum foreign direct investment into the country.
9. It would function as a transparent effective and investor-friendly single window providing clearance for foreign investment proposals.
10. The Board will lay down its own mode and working procedures keeping in view the requirements of each proposal considered by it.
Approval Levels
11. The recommendations of FIPB in respect of the project-proposals each involving a total investment of Rs.600 crores or less would be considered and approved by the Industry Minister.
12. The recommendations in respect of the projects each with a total investment of above Rs 600 crores would be submitted to the Cabinet Committee on Foreign Investment (CCFI) for decision.
13. The CCFI would also consider the proposals which may be referred to it or which have been rejected by the Industry Minister.
14. The approval letters in all cases will be issued by the Secretariat of FIPB.
Secretariat
15. There shall be only one secretariat of FIPB to be located in the Department of Industrial Policy and Promotion, Ministry of Industry. This secretariat would receive and process the applications/proposals for foreign investment and place them before FIPB for consideration. Therefater it would submit the recommendations of the Board to the Industry Minister or CCFI, as the case may be, for decision. The secretariat will ensure that all the applications received by it are put up before FIPB within 15 days of their receipt and the administrative ministries must offer their comments either prior to and/or in the meeting of FIPB. The secretariat would also be responsible for communicating to the applicants, the decisions of the governemnt on their proposals and would carry on the activities relating to post-approval amendments, providing advise and guidance to the entrepreneurs and investors and investment promotion and facilitation.
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