In a move that will ease FDI inflows to the country, the government on Thursday decided to empower the Foreign Investment Promotion Board to clear foreign investment proposals up to Rs 1,200 crore. Only larger proposals need the approval of the Cabinet Committee on Economic Affairs. Hitherto, FIPB cleared FDI proposals only up to Rs 600 crore.
?The recommendation of FIPB on proposals with total foreign equity inflow of and below Rs 1,200 crore will be considered by the finance minister for approval,? home minister P Chidambaram said, following a CCEA meeting at which the decision was taken.
Under the new relaxation, only the foreign investment aspect will be considered when deciding whether a project would be put up before the CCEA, unlike the current practice of taking into account total project cost.
This means only projects involving foreign investment of more than Rs 1,200 will be approved by the CCEA, rather than those breaching that size when domestic investment is also considered. This ?is expected to save time and efforts for FIPB and CCEA, and also expedite foreign investment inflows,? Chidambaram said.
Chidambaram further said foreign investors need no longer seek fresh approvals from the government or FIPB in sectors that have been transferred to the automatic route, or where FDI caps have been removed.
FDI into India grew 13.2% to $1.54 billion in December 2009, from $1.36 billion in December 2008, according to RBI data. FDI inflows in April-December 2009 stood at $21.5 billion.