DPIIT to Set Strict Timelines for Faster FDI Clearances

The Department for Promotion of Industry and Internal Trade (DPIIT) plans to enforce stricter timelines for approving Foreign Direct Investment (FDI) proposals in prioritized sectors. DPIIT Secretary Rajesh Kumar Singh highlighted that delays are due to non-adherence to the standard operating procedures (SOPs). The move aims to expedite FDI approvals and streamline processes.

The Department for Promotion of Industry and Internal Trade (DPIIT) is set to implement stricter timelines for the approval of Foreign Direct Investment (FDI) proposals in prioritized sectors, a senior official disclosed.

DPIIT Secretary Rajesh Kumar Singh explained that, despite the existence of standard operating procedures (SOPs) for these clearances, delays persist due to non-compliance. Singh was responding to the recent Budget announcement aimed at simplifying rules for FDI and overseas investments to encourage foreign investment and prioritize certain sectors.

"The goal is to expedite the clearance and approval process," Singh stated, adding that the government will urge concerned ministries to prioritize applications. The Foreign Investment Facilitation Portal (FIFP), developed after the 2017 dissolution of the Foreign Investment Promotion Board (FIPB), will continue to handle FDI proposal filings, which are then forwarded to the relevant ministries and departments for necessary approvals.

Singh noted that the DPIIT would create timelines for clearances from various agencies, ensuring India's administrative machinery does not delay FDI proposals. This directive comes as FDI equity inflows into India dropped by 3.49% to $44.42 billion in 2023-24, largely affecting sectors like services, computer hardware, and telecom.

Further, the secretary highlighted potential reforms, including reducing corporate tax for foreign firms from 40% to 35%, which could incentivize more foreign investment. The recent rationalization of customs duty, addressing inverted duty structures in sectors such as electronics and leather, is also aimed at boosting domestic manufacturing.

(With inputs from agencies.)