Jaitley Announces Scrapping of Foreign Investment Promotion Board

Finance Minister Arun Jaitley also said that further liberalisation of the FDI policy is under consideration. (Photo: PTI)

Finance Minister Arun Jaitley on Wednesday announced the abolition of the FIPB (Foreign Investment Promotion Board), a body that clears proposals envisaging foreign investment up to Rs 5,000 crore.

The minister also announced that further liberalisation of the FDI policy is under consideration.

FIPB has successfully implemented e-filing and online processing of FDI applications. We have now reached a stage where FIPB can be phased out. We have, therefore, decided to abolish the FIPB in the year 2017-18. Our road map for the same will be announced in the next few months.

Arun Jaitley, Union Finance Minister 

"In the meanwhile, further liberalisation of the FDI policy is under consideration and necessary announcements will be made in due course," he said.

Investments in sectors that are not under the automatic route require approval of the FIPB.

Over 90 per cent of foreign direct investment (FDI) comes through automatic route. Currently, the FIPB offers a single-window clearance for applications for FDI in India that are under the approval route.The sectors under automatic route do not require any prior approval from the FIPB and are subject only to sectoral laws.

The FIPB was initially constituted under the Prime Minister's Office (PMO) in the wake of the economic liberalisation drive of the early 1990s.

The Board was reconstituted in 1996, with the reins of the FIPB passing to the Department of Industrial Policy and Promotion (DIPP). In 2003, it came under the Department of Economic Affairs, under the Ministry of Finance, in 2003.

FDI into the country increased by 30 percent to $21.62 billion during April-September this fiscal.

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