Foreign Investment Promotion Board (FIPB)

The Foreign Investment Promotion Board (FIPB) was a national agency of Government of India, with the remit to consider and recommend foreign direct investment (FDI) which does not come under the automatic route. India attract net inward foreign direct investment amounting to USD 30.76 billion during the fiscal year ended March 2014, a 14.13% increase compared to the previous fiscal year. It acted as a single window clearance for proposals on foreign direct investment (FDI) in India. The Foreign Investment Promotion Board (FIPB) was housed in the Department of Economic Affairs, Ministry of Finance. FIPB was abolished on 24 May 2017, as announced by Finance Minister Arun Jaitley during 2017-2018 budget speech in Lok Sabha.

The Foreign Investment Promotion Board (FIPB) that the government abolished on Wednesday probably held its 245th and last meeting on 17 April.

FIPB was an inter-ministerial body housed in the Department of Economic Affairs in the finance ministry responsible for processing foreign direct investment (FDI) proposals and recommending for approval to the finance minister and subsequently to the Cabinet Committee on Economic Affairs if the investment amount exceeded Rs3,000 crore.

FIPB was chaired by the economic affairs secretary and its other permanent members included secretary, Department of Industrial Policy and Promotion (DIPP), commerce secretary, economic relations secretary in the ministry of external affairs and overseas Indian affairs secretary. The small, medium and micro enterprises secretary and the revenue secretary were co-opted on the board.

The board used to co-opt other secretaries in the Central government and when a matter pertaining to their department was scheduled to be discussed in the meeting.

That now has changed forever. Now individual departments of the government have been empowered to clear FDI proposals in consultation with DIPP which will also issue the standard operating procedures for processing applications.

Briefing reporters on Wednesday, finance minister Arun Jaitley said the decision of the cabinet will be implemented immediately and pending FDI proposals before the defunct FIPB will be sent back to individual line ministries for necessary action.

Now timelines will be fixed for approving applications regarding FDI by competent authorities and a rejection by the department concerned has been made difficult as it will now mandatorily require concurrence of DIPP.