The government of India has set up a a high powered body known as the Foreign Investment Promotion Board to promptly process and clear proposals for foreign investments not covered under the Automatic Route of RBI. This specially empowered Board functions in the office of the Prime Minister, as the single window agency dealing with matters relating to FDI as well as promoting investment into the country. It is chaired by Secretary Industry (Department of Industrial Policy & Promotion).

Objective

Its objective is to promote FDI into India by undertaking investment promotion activities in India and abroad by facilitating investment in the country through international companies, non-resident Indians and other foreign investors.

Clearance of Proposals

Early clearance of proposals submitted to it through purposeful negotiation and discussion with potential investors. Reviewing policy and put in place appropriate institutional arrangements and transparent rules and procedures and guidelines for investment promotion and approvals.

The FIPB is expected to meet every week to ensure quick disposal of the cases pending before it. It endeavours to ensure that the Government's decisions on FDI proposals are communicated to the applicant within six weeks. Foreign Investment proposals received by the board's secretariat should be put up to the Board within 15 days of receipt and the Administrative Ministries must offer their comments either prior to and/or in the meeting of the FIPB. It would function as a transparent effective and investor friendly single window providing clearance for investment proposals.

The Board will comprise the core group of secretaries to Government and would have the following composition :-

1. Industry Secretary - Chairman, (Secretary Department of Industrial Policy and Promotion), Government of India.

2. Finance Secretary, Government of India.

3. Commerce Secretary, Government of India.

4. Secretary (Economic Relations), Ministry of External Affairs, Government of India.

The Board may coopt other Secretaries to the Government of India and top officials of financial institutions, banks and professional experts of Industry and Commerce, as and when necessary.

The main functions of the Board will be as follows:

1. to ensure expeditious clearance of the proposals for foreign investment;

2. to review periodically the implementation of the proposals cleared by the Board;

3. to review, on a continuous basis, the general and sectoral policy regimes relating to FDI and in consultation with the Administrative Ministries and other concerned agencies, evolve a set of transparent guidelines for facilitating foreign investment in various sectors;

4. to undertake investment promotion activities including establishment of contact with and inviting selected international companies to invest in India in the appropriate projects;

5. to interact with the Industry Association/Bodies and other concerned government and non-government agencies on relevant issues in order to facilitate increased inflow of FDI;

6. to identify sectors into which investment may be sought keeping in view the national priorities and also the specific regions of the world from which investment may be invited through special efforts;

7. to interact with the Foreign Investment Promotion Council (FIPC) being constituted separately in the Ministry of Industry; and

8. to undertake all other activities for promoting and facilitating foreign direct investment, as considered necessary from time to time. The Board will submit its recommendations to the Government for suitable action.

Approvals

The recommendations of FIPB in respect of the project-proposals each involving a total investment of Rs.600 crores or less would be considered and approved by the Industry Minister.

The recommendations in respect of the projects each with a total investment of above Rs 600 crores would be submitted to the Cabinet Committee on Foreign Investment (CCFI) for decision. The CCFI would also consider the proposals which may be referred to it or which have been rejected by the Industry Minister.

The approval letters in all cases will be issued by the Secretariat of FIPB. The FIPB has accorded approval to the investments of a large number of corporations such as McDonalds, General Electric, Coca-Cola and Fujitsu in the recent past. It normally processes applications within 6 weeks.