DIPP issues standard operating procedures to decide fate of FDI under approval route

-System of approving foreign investment proposals in India by an inter-ministerial body is now officially replaced with approval by distinct administrative ministries / departments in accordance with the standard operating procedure issued by DIPP.

-Foreign investment proposal proposed to be approved within 8 to 10 weeks from the date of filing on the online portal.

-Competent Authorities to hold regular monthly review with respect to the foreign investment proposals pending with them followed up a joint quarterly review by DIPP.


The process of phasing out the Foreign Investment and Promotion Board (“FIPB”) has finally come to an end with the release of Standard Operating Procedure (“SOP”) for processing the FDI proposals by the Department of Industrial Policy and Promotion (“DIPP”) on June 29, 2017. The SOP has been prepared by DIPP in consultation with administrative ministries / departments / sector regulators to guide the administrative ministries / departments (“Competent Authority”) in processing of the FDI proposals and ensure consistency of treatment and uniformity of approach across sectors. The focus of the SOP is to process such applications in a time bound manner so that the new regime for foreign investments may be simpler in execution and expeditious in disposal. The SOP shall come into effect from the date of its publication. (https://dipp.gov.in/whats-new/standard-operating-procedure-sop-processing-fdi-proposals)

On-line Filing through Foreign Investment Facilitation Portal

As per the SOP, proposals for foreign investment in sectors/activities requiring Government approval under the Consolidated FDI Policy Circular of 2016, as amended from time to time (“FDI Policy”), would be filed online on the revamped FIPB portal, rechristened as Foreign Investment Facilitation Portal (“FIFP”). In crux all applications have to be filed online on FIFP with some additional requirement that if application is not digital signed on FIFP portal then physical copy is required to submitted to competent authority with 5 days from date of communication to person concerned on FIFP portal.

LINK FOR COMPETENT AUTHORITY: https://fifp.gov.in/Forms/ListofNodalOfficer.pdf. 

Processing of FDI Proposals

Identification of Competent Authorities

As and when the proposals for foreign investment are e-filed on the FIFP, DIPP is required to identify the Competent Authority for such proposals and accordingly e-transfer the proposals to the respective Competent Authority within 2 days from the date of filing of the online application .However, in cases where there are doubts as to which is the concerned administrative ministry / department, the onus in such cases would be on DIPP to identify the Competent Authorities where the application may be processed for decision. 


S. No. Action Points Time Period No. of days
1 Filing of the investment proposal on FIFP X
2 Dissemination of investment proposal received on FIFP by DIPP to the Competent Authorities, RBI, MEA and DoR 2 days X + 2
2A Submission of signed physical copy of the investment proposal with the Competent Authority* 5 days X + 7^
3 Initial scrutiny of the investment proposal by Competent Authority, and seeking relevant information / document from the applicant 1 week X + 14
4 Applicant to provide relevant clarification/information/ document to the Competent Authority in relation to investment proposal 1 week X + 21
5 Submission of comments / clarifications by consulted administrative ministry / departments / regulatory bodies or DIPP@ or RBI or any other relevant authority 4 weeks from 2A X + 35#
6 Grant of approval by the Competent Authority on the FIFP for proposal not requiring security clearance 6 weeks from 2A X + 49
6A Submission of comments by MHA on proposals requiring security clearance in strategic sectors such as aviation and telecom 6 weeks from 2A X + 49$
7 Grant of approval by the Competent Authority on the FIFP for proposal requiring security clearance 2 weeks from 6A X + 63

Grant of Approval, with Conditions

While examining the investment proposals, the Competent Authority is required take adequate care and decide each proposal on its merits. During the process if the Competent Authority proposes to reject any proposal or grant approval subject to conditions not otherwise prescribed under the FDI Policy or any other sectoral laws/regulations, it is required to seek concurrence of DIPP within 8 – 10 weeks from the receipt of such proposal and accordingly decide on such application. Prescribed timeline for the clearing an investment proposal in such cases may extend by 2 weeks in addition to the usual timeline (as indicated in 6 & 7 above).

In order to ensure uniformity in terms of the conditions to be imposed by the Competent Authority while granting its approval on the investment proposal, the SOP prescribes a format for the letter of approval at Annexure 2 of the SOP that can be issued to all applicant subject to permissible deviation/modification.


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