Continuing its stance of promoting ‘maximum governance and minimum government’, the Union Cabinet of the Government of India chaired by Prime Minister Narendra Modi on 24 May 2017 gave its approval for phasing out the Foreign Investment Promotion Board (FIPB) and empowered individual government ministries/ departments to process applications for foreign direct investment (FDI) requiring government approval. A press release was issued on 24 May 2017 itself by the Press Information Bureau of the Government of India (Press Release) in this regard.
The FIPB was an inter-ministerial body housed in the Department of Economic Affairs of the Union Ministry of Finance. It was the body responsible for processing of FDI proposals, and making recommendations for government approval.
Union Finance Minister Arun Jaitley had in his budget speech on 1 February 2017 presented before the Lower House of Indian Parliament (the Lok Sabha), stated that the FIPB would be abolished in the financial year 2017-2018, and said that a roadmap was likely to be introduced in this regard.
Pursuant to the approved phasing out of the FIPB, the Press Release states that the task of processing applications for FDI and approvals of the Union Government under the extant Foreign Direct Investment Policy (FDI Policy) and the Foreign Exchange Management Act, 1999 shall be managed by the concerned ministries/ departments in consultation with the Department of Industrial Policy and Promotion of the Ministry of Commerce (DIPP). The DIPP will also issue the standard operating procedure for processing of applications and decision(s) of the Union Government under the FDI Policy.
The Press Release may be accessed at the following link: