APPROVAL PROCESS FOR FDI IN INDIA

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The proposals for FDI in India are processed according to the standard operating procedure (SOP) devised by the Department for the promotion of Industry and internal trade (DPIIT).

Following are the stages which are there in FDI approval process:

• APPLICATION SUBMISSION: Preliminary stage to initiate a process of FDI in India is to submit the application in the prescribed format, which requires prior approval from several ministries via single window i.e. Foreign Investment Facilitation Portal (FIFP) working under the ambit of Department for promotion of industry and internal trade (DPIIT).

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• UPLOADING DOCUMENTS: There are certain other documents which need to be attested with the application form for FDI approval on the FIFP portal. These documents will help in verifying the application of the applicant.

• ASSIGNING OF CASES: Within 2 working days, DPIIT will assign the cases.
  • In the case where the documents are digitally signed by the applicant, then physical submission of the same is not required.
  • In the case where the documents are not digitally signed, then the physical copy of the proposal is to be submitted to the Competent Authority within 5 days of such intimation.

• CIRCULATION OF PROPOSAL TO VARIOUS DEPARTMENT: Since FDI in India is regulated under FEMA regulations, therefore, it is necessary to circulate a copy of the same to RBI to consider it in that perspective. Some additional departments such as External Affairs, revenue, and finance are also equally important, so the proposal must be shared with these departments as well.

• SCRUTNIZAITON: Proposals are scrutinized within a week time and additional information must be served to department if required.

• FINAL APPROVAL/REJECTION: On getting all required information, the Competent Authority is required to give out its decision in next two weeks. Approval/rejection letters are sent online to the applicant, consulted Ministries/Departments and DIPP.
  {Note: Where total foreign equity inflow is more than INR 5000 crore, then it is required to place the same in front of Cabinet Committee on Economic Affairs (CCEA).

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