In the present scenario of Globalization, Foreign Investment/collaboration has become quite attractive and certainly cheaper source of investment. As we all know, India is the one of the biggest market of this globe and one of the fastest growing economy of this 21st century era is also one of the leading foreign investment destination.

In India, Investments can be made by non-residents in the equity shares/fully, compulsorily and mandatorily convertible debentures/fully, compulsorily and mandatorily convertible preference shares of an Indian company, through the Automatic Route or the Government Route.

Under the Automatic Route, the non-resident investor or the Indian company does not require any approval from Government of India for the investment. Whereas, under Government Route, prior approval of the Government of India is required. Proposals for foreign investment under Government route, are considered by Foreign Investment Promotion Board, hereinafter referred to as FIPB.


  • 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.5000 crore.
  • The recommendations of FIPB on proposals with total foreign equity inflow of more than Rs. 5000 crore would be placed for consideration of Cabinet Committee on Economic Affairs (CCEA).
  • The CCEA would also consider the proposals which may be referred to it by the FIPB/the Minister of Finance (in-charge of FIPB).


Companies may not require fresh prior approval of the Government i.e. Minister-incharge of FIPB/CCEA for bringing in additional foreign investment into the same entity, in the following cases:

  • Entities the activities of which had earlier required prior approval of FIPB/Cabinet Committee on Foreign Investment (CCFI)/CCEA and which had, accordingly, earlier obtained prior approval of FIPB/CCFI/CCEA for their initial foreign investment but subsequently such activities/sectors have been placed under automatic route;
  • 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;
  • Additional foreign investment into the same entity within an approved foreign equity percentage/or into a wholly owned subsidiary.


The Foreign Investment Promotion Board (FIPB) offers a single window clearance for applications on Foreign Direct Investment (FDI) in India that are under the approval route.

The sectors under automatic route do not require any prior approval from FIPB and are subject to only sectoral laws.

The e-filing facility is an important initiative of the FIPB Secretariat to further enhance its efficiency and transparency of decision making. Once the e-filing of the application is completed, the application needs to file/courier only SINGLE copy of the printed version of the online application, along with the duly authenticated copy of the documents attached with the application.

Checklist / Documents / Requirement for FIPB Approval Application:

  • Certificates of incorporation(s) of the concerned entities
  • Certificates of Memorandum of Association of the concerned entities
  • FIRC
  • Copies of relevant past FIPB/SIA/RBI approvals, relating to the current proposal.
  • Certificates of Incorporation(s) and Memorandum of Association of the downstream investee company, if already formed. (In case of Downstream Investment)
  • In case of transfer of existing equity – the Board Resolution of the investee company and the consent of transferor shareholder(s).
  • In case of fresh issue of shares – the Board/Shareholders Resolution of the investee / issuing company to that effect.
  • Declaration Under Press Note 1 of 2005 (Existing Investment) from each of the foreign investor / collaborator, on their official letter heads, with full name and contact address of the signatory of the declaration, if any.
  • A copy of the JV agreement/ Shareholders’ agreement/ technology transfer/trademark / brand assignment agreement (as applicable), in case there are existing ventures, if applicable.
  • The comments of the Indian partners/ technical/ trademark collaborators about the new venture, on their official letter heads, with full name and contact address of the signatory of the comments, if applicable.
  • Provide any website link for more information.
  • Diagrammatical representation of the flow and funds from the original investor to the investee company.
  • Any Other information / attachment.


  • Applications seeking FIPB approval as an investee or investor company for the first time are called “Fresh Applications”. Applicants may, therefore, click on the “Fresh Application” link in case they are approaching FIPB for the first time.
  • “Amendment Applications” are those which seek an amendment to the FIPB approval already granted.
  • On submission of the Mandatory Preliminary Application, whether for Fresh or Amendment cases, a computer generated unique (FC Registration No.) number shall be allotted. The applicant must also quote this number in all future correspondences with the FIPB.
  • For Amendment Applications which are procedural in nature, users may click “Amendment Application which is procedural in nature” and submit in the prescribed proforma.
  • Any query pertaining to application filed or in the process of being filed, may be asked through the link – “Clarification/Query”.
  • In case an applicant wishes to make a change in the recently submitted application, that has not been processed, he/she may click on the link “Updation/Additional Information Form”. Additional details being sought by the FIPB may also be submitted through the same link.
  • It is mandatory to file complete details of the Directors in applications seeking FIPB approval in Telecom, Defense and Private Security Services sectors to enable capturing the inputs in the first instance for expeditious processing from the security angle. This requirement is also mandatory in case the foreign collaborator has Bangladesh, Chinese/Hong Kong registration/links.

After e-filing the application, one hard copy bearing the Unique FC Registration No. generated after submitting the Mandatory Preliminary Application, in original, with all annexures should immediately be sent by post at FIPB Facilitation Center, North Block, New Delhi-110001.

Only the applications that are complete in all respect, filed three weeks prior to the scheduled date of the FIPB meeting, only, shall be taken up for consideration in that meeting.


Foreign Direct Investment

(Author is a Company Secretary from Delhi and can be contacted at [email protected])

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October 2021