Govt to fast-track clearance of FDI proposals from bordering countries including China; norms may be eased

To expedite the FDI clearance process and ensure timely action, there will soon be colour coding and an automatic alert system on the foreign investment facilitation portal.

In a bid to boost foreign investment, the central government is getting ready to ease norms to expedite the approval process for Foreign Direct Investment (FDI) from bordering countries including China, sources said.

In the last week of November, a crucial meeting was held on the issue under the chairmanship of Cabinet Secretary Rajiv Gauba. During the meeting, DPIT Secretary Anurag Jain made a presentation on the progress of FDI proposals. According to sources, the cabinet secretary expressed his displeasure at the pending FDI proposals.

After reviewing the pending FDI proposals, the cabinet secretary asked the ministries concerned to take quick decisions once proposals got cleared from the inter-ministerial committee (IMC).

Gauba also emphasised the need for faster clearance of FDI proposals from bordering countries. It has been decided that a monthly meeting of IMC would be convened under the chairmanship of the home secretary, especially for the proposals from bordering countries.

Gauba asked the DPIT secretary to finalise the threshold for FDI from bordering countries as soon as possible. The sources said the government is considering a 25 percent beneficial ownership threshold for FDI proposals, to determine if they need to go through an approval process.

Last year, the government had put some restrictions on FDI from bordering countries.

To expedite the FDI clearance process and ensure timely action, there will soon be colour coding and an automatic alert system on the foreign investment facilitation portal, so that officials concerned will be alerted about pending proposals.

Currently, as many as 120 FDI proposals are pending with different departments, sources say. Out of these, around 90 proposals are from bordering countries including China. Some proposals are worth more than Rs 1,000 crore.

Source:Money control