46 FDI proposals pending: DPIIT writes to 17 depts
The Department for Promotion of Industry and Internal Trade (DPIIT) has written to 17 government departments to expedite decision-making on foreign direct investment (FDI) proposals awaiting government clearance. As many as 46 FDI proposals are awaiting government decision and have breached the government-mandated 12-week time limit for grant of approval, according to a person familiar with the matter.
DPIIT, in a letter, pointed out that government departments often do not adhere to the timeline, in keeping with the standard operating procedure for processing FDI proposals, the source told Business Standard.
The department sought immediate intervention from relevant government departments, including the Ministry of Finance’s Department of Economic Affairs (DEA), to ensure a time-bound green signal for these pending proposals. Of these 46 proposals, 27 have also received comments from the Ministry of Home Affairs regarding security clearance. The decision is now pending with the respective government department.
While the details of the FDI proposals were not available, applications requiring security clearance from the home ministry include any investment proposal in broadcasting, telecommunications,
satellite, defence, and civil aviation, among others. They also include FDI proposals from countries sharing land borders, such as China.
A spokesperson for DPIIT said that the department oversees FDI applications received on the Foreign Investment Facilitation Portal through the National Single Window System portal and forwards them to the administrative ministry concerned for decision. “As a routine exercise, communications are sent to the relevant administrative ministries/departments, from time to time, to ensure that the proposals are disposed of in a timebound manner. Accordingly, a communication was sent by DPIIT to all relevant administrative ministries/departments of the Government of India for expeditious disposal of the 46 pending proposals beyond the timeline,” the spokesperson said in response to a query from Business Standard.
A spokesperson for the finance ministry mentioned that DPIIT, as the nodal ministry for FDI proposals, periodically reviews them and shares the status with the ministries /departments in question.
“The DPIIT letter mentions 46 pending proposals across all ministries/departments. Of them, only two proposals pertain to DEA, and they are being processed on priority, including through interministerial/stakeholder consultation,” the ministry said in response to the query.
To turn India into a global investment hotspot, the National Democratic Allianceled government has been taking steps over the past decade to remove procedural delays, promote ease of doing business, and cut red tape.
Speedy clearance of foreign investment proposals assumes even more significance as the government now targets annual FDI inflows worth $100 billion, on average, for the next five years. In the past five years, the annual average was $70 billion.
Although the pendency is currently much lower than a few years ago, delays in approval continue. The government abolished the Foreign Investment Promotion Board (FIPB) in May 2017 to simplify the approval process of foreign investment.
A new system for granting FDI approvals was put in place in lieu of FIPB. As a result, the work relating to the processing of FDI applications was delegated to the relevant ministries and departments.
Under the FDI policy, except for certain strategically important sectors, most sectors are open for 100 per cent FDI under the automatic route.