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Cabinet approves FIPB abolition, ministries to process FDI applications
MUMBAI: With the union cabinet abolishing the 25-year old Foreign Investment Promotion Board (FIPB), the administrative ministries/departments will process applications for foreign direct investment (FDI) requiring government approval.
The Ministry of Information & Broadcasting (MIB) will process the FDI applications related to the media and entertainment sector.
The union cabinet, chaired by the Prime Minister Narendra Modi, has given its approval to the phasing out of FIPB. The proposal entails abolishing the FIPB and allowing administrative ministries/departments to process applications for FDI requiring government approval.
Henceforth, the work related to the processing of applications for FDI and approval of the government under the extant FDI policy and FEMA will now be handled by the concerned ministries/departments in consultation with the Department of Industrial Policy & Promotion (DIPP), Ministry of Commerce, which will also issue the Standard Operating Procedure (SOP) for processing of applications and decision of the government under the extant FDI policy.
The move will provide ease of doing business and will help in promoting the principle of ‘Maximum Governance and Minimum Government’, the government said.
Presently, applications are considered by the FIPB in Department of Economic Affairs (DEA), Ministry of Finance, comprising various secretaries of Government of India, for making recommendation on FDI applications. After the cabinet decision, it would be handled independently by administrative ministries as per sector.