July 2017


A part of its proposal to make doing business in India easier, the Finance minister Arun Jaitley had announced his intention to reduce the tier in the government's approvals and licensing process. Compliance of FDIs already approved, litigations and liabilities & RTI requests will also be handled by the respective ministry.

Earlier, some sectors required approval from the FIPB to bring in Foreign Direct Investments (FDI). Select sectors were exempted from any approval prior to bringing in FDI, while certain ministries handled their own FDI requests.


The FIPB (Foreign Investment Promotion Board) has now been abolished.

However, applications requiring the approval of the government will continue to be received by the existing FIPB portal ( The FIPB portal management has been transferred to the Department of Industrial Policy and Promotion (DIPP) and the DIPP will continue to be the administrative ministry for this purpose.


An official memorandum issued by the Ministry of Finance (MoF) has declared that the Ministry of Information & Broadcasting (MIB) is now the nodal ministry for all Foreign Direct Investment (FDI) proposals in broadcasting and print media.


However, the abolition of the FIPB seems to have spawned many more issues, after the FDI licensing has been de-centralised.


Approvals for proposals relating to satellite and telecom FDI investment have been put under the ambit of the Department of Space.


FDIs in the telecom will be approved by the Department of Telecom (DoT).

This would imply that should there be a proposal to bring in FDI for an MSO who offers Cable TV & Broadband, separate applications will have to be made to the MIB & DoT.


Applications for foreign investment in an investment company or an Indian company engaged only in the activity of investing in the capital of other Indian companies will be processed by the Department of Economic Affairs, Ministry of Finance, irrespective of the sector in which the investment is being made.


Applications for investments from 'countries of concern' requiring security clearance as per FEMA, FDI policy and security guidelines will be processed by the Ministry of Home Affairs (MHA), for investments falling under the automatic route sectors.

Cases pertaining to other approval route sectors/activities requiring security clearance will be processed by the nodal administrative ministries/ departments in consultation with the MHA.


FDI proposals by non-resident Indians (NRIs)/export-oriented units (EOUs) requiring approval of the government will be dealt with by Department of Industrial Policy and Promotion (DIPP) and the DIPP will continue to be the administrative ministry for this purpose.

The DIPP will also handle applications for issue of equity shares under the government route for import of capital goods machinery equipment (excluding second-hand machinery), as well as applications for issue of equity shares for preoperative/pre-incorporation expenses (including payments of rent, etc.).

Where there is a doubt about the administrative ministry concerned, the DIPP shall identify the administrative ministry/department that will process the application.

Consensus of the DIPP is mandatory, when an FDI application is to be rejected.

It remains to be seen if the de-centralisation of the FIBP will facilitate or complicate FDI applications & investments.