The Foreign Investment Promotion Board (FIPB) is a government body that offers a single

window clearance for proposals on Foreign Direct Investment (FDI) in India that are not allowed
access through the automatic route. FIPB comprises of Secretaries drawn from different
ministries with Secretary, Department of Economic Affairs, MoF in the chair. This inter-ministerial
body examines and discusses proposals for foreign investments in the country for sectors with
caps, sources and instruments that require approval under the extant FDI Policy (prescribed vide
Circular 1 of 2011) on a regular basis. The Minister of Finance, considers the recommendations
of the FIPB on proposals for foreign investment up to 1200 crore. Proposals involving foreign
investment of more than 1200 crore require the approval of the Cabinet Committee on Economic
Affairs (CCEA).

The Foreign Investment Promotion Board (FIPB) is a national agency of Government of India,
with the remit to consider and recommend foreign direct investment (FDI) which does not come
under the automatic route. It provides a single window clearance for proposals on FDI in India
FIPB is mandated to play an important role in the administration and implementation of the
Governments FDI policy. It has a strong record of actively encouraging the flow of FDI into the
country through speedy and transparent processing of applications, and providing on-line
clarification. In case of ambiguity or a conflict of interpretation, the FIPB has always stepped in
with an investor-friendly approach.
The e-filing facility is an important initiative of the Secretariat of the FIPB to further enhance its
efficiency and transparency of decision making. Any suggestions to improve the e-filing system
and FIPB procedure are welcome.
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FDI

Foreign Direct Investment (FDI) in India is the major monetary source for economic
development in India. Foreign companies invest in India to take benefits of cheaper wages and
changing business environment of India. Economic liberalisation started in India in wake of the
1991 economic crisis and since then FDI has steadily increased in India.[1][2]According to
the Financial Times, in 2015 India overtook China and the US as the top destination for the
Foreign Direct Investment.

The Government of India has amended FDI policy to increase FDI inflow. In 2014, the
government increased foreign investment upper limit from 26% to 49% in insurance sector. It
also launched Make in India initiative in September 2014 under which FDI policy for 25 sectors
was liberalised further.[8][9] As of April 2015, FDI inflow in India increased by 48% since the launch
of "Make in India" initiative.[10] India was ranking 15th in the world in 2013 in terms of FDI inflow, it
rose up to 9th position in 2014[11][unreliable source?] while in 2015 India became top destination for foreign
direct investment

Sectors[edit]
During 201415, India received most of its FDI
from Mauritius, Singapore, Netherlands, Japan and the US.[12] On 25 September
2014, Government of India launched Make in India initiative in which policy statement on 25
sectors were released with relaxed norms on each sector.[13] Following are some of major sectors
for Foreign Direct Investment.

Infrastructure[edit]
10% of India's GDP is based on construction activity. Indian government has plans to invest $1
trillion on infrastructure from 20122017. 40% of this $1 trillion is to be funded by private sector.
100% FDI under automatic route is permitted in construction sector for cities and townships. [14][15]
[non-primary source needed][16]

Automotive[edit]
FDI in automotive sector was increased by 89% between April 2014 to February 2015. [17] India is
7th largest producer of vehicles in the world with 17.5 million vehicles annually. 100% FDI is
permitted in this sector via automatic route. Automobiles shares 7% of the India's GDP.[18]

Pharmaceuticals[edit]
Indian pharmaceutical market is 3rd largest in terms of volume and 13th largest in terms of value.
Indian pharma industry is expected to grow at 20% compound annual growth rate from 2015 to
2020.[19] 100% FDI is permitted in this sector.[20][21][22]

Service[edit]
FDI in service sector was increased by 46% in 201415. Service sector
includes banking, insurance, outsourcing, research & development, courier and technology
testing.[23] FDI limit in insurance sector was raised from 26% to 49% in 2014. [24]

Railways[edit]
100% FDI is allowed under automatic route in most of areas of railway like High speed train,
railway electrification, passenger terminal, mass rapid transport systems etc. [25][26]MumbaiHyderabad high speed corridor project is single largest railway project in India, other
being CSTM-Panvel suburban corridor. Foreign investment more
than90000 crore (US$13 billion) is expected in these projects.[27]

Chemicals[edit]
Chemical industry of India earned revenue of $ 155160 billion in 2013. [28] 100% FDI is allowed in
Chemical sector under automatic route. Except Hydrocynic acid, Phosgene, Isocynates and their
derivatives, production of all other chemicals is de-licensed in India. [29] India's share in global
specialty chemical industry is expected to rise from 2.8% in 2013 to 67% in 2023. [30]

Textile[edit]
Textile is one major contributor to India's export. Nearly 11% of India's total export is textile. This
sector has attracted about $ 1647 million from April 2000 to May 2015. 100% FDI is allowed
under automatic route.[31] During year 201314, FDI in textile sector was increased by 91%.
[32]

Indian textile industry is expected reach up to $ 141 billion till 2021.

RECENT POLICY MEASURES

Government eases FDI norms in 15 major sectors.

Townships, shopping complexes & business centres all allow up to

100% FDI under the auto route. Conditions on minimum capitalisation &
floor area restrictions have now been removed for the construction
development sector.

India's defence sector now allows consolidated FDI up to 49% under

the automatic route. FDI beyond 49% will now be considered by the
Foreign Investment Promotion Board. Govt approval route will be required
only when FDI results in a change of ownership pattern.

Private sector banks now allow consolidated FDI up to 74%.

Up to 100% FDI is now allowed in coffee/rubber/cardamom/palm oil

& olive oil plantations via the automatic route.

100% FDI is now allowed via the auto route in duty free shops
located and operated in the customs bonded areas.

Manufacturers can now sell their products through wholesale and/or

retail, including through e-commerce without Government Approval.

Foreign Equity caps have now been increased for establishment &
operation of satellites, credit information companies, non-scheduled air
transport & ground handling services from 74% to 100%.

100% FDI allowed in medical devices

FDI cap increased in insurance & sub-activities from 26% to 49%

FDI up to 49% has been permitted in the Pension Sector.

Construction, operation and maintenance of specified activities of

Railway sector opened to 100% foreign direct investment under automatic
route.

FDI policy on Construction Development sector has been liberalised

by relaxing the norms pertaining to minimum area, minimum capitalisation
and repatriation of funds or exit from the project. To encourage investment
in affordable housing, projects committing 30 percent of the total project
cost for low cost affordable housing have been exempted from minimum
area and capitalisation norms.

Investment by NRIs under Schedule 4 of FEMA (Transfer or Issue of

Security by Persons Resident Outside India) Regulations will be deemed to
be domestic investment at par with the investment made by residents.

Composite caps on foreign investments introduced to bring uniformity

and simplicity is brought across the sectors in FDI policy.

100% FDI allowed in White Label ATM Operations.

Chapter 5: Foreign Investment Promotion Board (FIPB) 5.1 Constitution of FIPB

5.1.1 FIPB comprises of the following Secretaries to the Government of India: (i)
Secretary to Government, Department of Economic Affairs, Ministry of Finance
Chairperson (ii)Secretary to Government, Department of Industrial Policy &
Promotion, Ministry of Commerce & Industry (iii) Secretary to Government,
Department of Commerce, Ministry of Commerce & Industry (iv)Secretary to
Government, Economic Relations, Ministry of External Affairs (v)Secretary to
Government, Ministry of Overseas Indian Affairs. 5.1.2 The Board would be able
to co-opt other Secretaries to the Central Government and top officials of
financial institutions, banks and professional experts of Industry and Commerce,
as and when necessary. 5.2 Levels of Approvals for Cases under Government
Route 5.2.1 The Minister of Finance who is in-charge of FIPB would consider the
recommendations of FIPB on proposals with total foreign equity inflow of and
below Rs. 2000 crore. 5.2.2 The recommendations of FIPB on proposals with total
foreign equity inflow of more than Rs. 2000 crore would be placed for
consideration of Cabinet Committee on Economic Affairs (CCEA). 5.2.3 The CCEA
would also consider the proposals which may be referred to it by the FIPB/the
Minister of Finance (in-charge of FIPB). 5.3 Cases which do not require Fresh
Approval 5.3.1 Companies may not require fresh prior approval of the
Government i.e. Minister-in-charge of FIPB/CCEA for bringing in additional foreign
investment into the same entity, in the following cases: (i) Entities the activities
of which had earlier required prior approval of FIPB/CCFI/CCEA and which had,
accordingly, earlier obtained prior approval of FIPB/CCFI/CCEA for their initial
foreign investment but 38 subsequently such activities/sectors have been placed
under automatic route; (ii)Entities the activities of which had sectoral caps earlier
and which had, accordingly, earlier obtained prior approval of FIPB/CCFI/CCEA for
their initial foreign investment but subsequently such caps were
removed/increased and the activities placed under the automatic route; provided
that such additional investment along with the initial/original investment does
not exceed the sectoral caps; and (iii) Additional foreign investment into the
same entity where prior approval of FIPB/CCFI/CCEA had been obtained earlier
for the initial/original foreign investment due to requirements of Press Note
18/1998 or Press Note 1 of 2005 and prior approval of the Government under the
FDI policy is not required for any other reason/purpose. (iv) Additional foreign

investment into the same entity within an approved foreign equity percentage/or
into a wholly owned subsidiary. 5.4 Online Filing of Applications for
FIPB/Governments Approval 5.4.1 Guidelines for e-filing of applications, filing of
amendment applications and instructions to applicants are available at FIPBs
website