Source: The Economic Times, July 10, 2017
NEW DELHI: As many as 71 pending foreign investment proposals, including those of Amazon, Grofers, Urban Ladder, One97 (which runs Paytm) and Jasper Infotech (Snapdeal), are being fast-tracked.
Many of these had been pending with the recently abolished Foreign Investment Promotion Board since 2015.
The Department of Industrial Policy and Promotion (DIPP) will now distribute them to the relevant ministries and check the status of each pending application at a joint review meeting later this month.
More than 14 are pending with the department of pharmaceuticals and eight with the telecom ministry. DIPP itself has to finalise six single-brand retail applications, include those by Amazon, Grofers, Urban Ladder and Supermarket Grocery among others.
“We would expedite decision on all pending applications now,” a senior government official told ET.
Other applications pending since 2015 include those of HSBC Securities and Indus Way Emerging Market Fund. The foreign direct investment (FDI) application of Jupiter Satellite is with the department of space.
The government has been relaxing the rules for FDI in single-brand retail, gradually increasing incentives for the sector. The cumulative foreign investment in retail stood at less than $1billion in March. With a layer of decision making removed after FIPB was scrapped, DIPP has been entrusted with the task of facilitating all FDI applications.
DIPP has also drafted the standard operating procedures (SoP) for processing FDI proposals at all ministries and set strict timelines.
Applications have to be decided in eight to 10 weeks. “The initial indications are that the transition from the previous system will be smooth,” said Devraj Singh, executive director, Ernst & Young.
“There was an apprehension earlier but with the SoP in place we feel applications will get resolved in a time-bound manner,” he said. Once a proposal is received, it will be sent in two days by DIPP to the concerned department and the Reserve Bank of India for comments from the perspective of the Foreign Exchange Management Act (Fema).
Proposals for foreign investment in sectors requiring security clearance will be referred to the home affairs ministry. All proposals will be forwarded to the external affairs ministry and Department of Revenue for information.
No new conditions can be added beyond the existing rules as per the SoP. No proposal can be rejected without getting DIPP on board.
The FIPB’s abolition is expected to increase the ease of doing business in the country and draw more foreign investments. More than 90% of India’s FDI inflows are through automatic route.