In a major decision aimed at further easing doing business in India, the Union Cabinet abolished the 25-year-old Foreign Investment Promotion Board (FIPB), obviating the need for prior clearance for Foreign Direct Investment in more than 90 percent cases. Industry lauded the move as a "bold" step that would add to the healthy inflow of foreign investment.
Announcing the decision, Finance Minister Arun Jaitley told reporters, only 11 sectors would require prior approval for Foreign Direct Investments (FDI).
"The cabinet took the important decision of abolishing the FIPB," Jaitley told reporters after the cabinet meeting. He said this was done to further ease doing of business in the country.
Explaining the rationale behind the decision, the Minister said that after the liberalisation of FDI rules, 91-95 per cent of FDI was coming in anyway through the "automatic" route, without needing FIPB clearance.
The Union Budget 2017-18 presented in February had announced the proposal for abolition of FIPB.
He also said that in the case of the 11 sectors that need prior approval for FDI, these would now be given by the ministries concerned. Wherever there are security considerations, the Home Minister's approval would also be taken, he added.
Announcing the decision, Finance Minister Arun Jaitley told reporters, only 11 sectors would require prior approval for Foreign Direct Investments (FDI).
"The cabinet took the important decision of abolishing the FIPB," Jaitley told reporters after the cabinet meeting. He said this was done to further ease doing of business in the country.
Explaining the rationale behind the decision, the Minister said that after the liberalisation of FDI rules, 91-95 per cent of FDI was coming in anyway through the "automatic" route, without needing FIPB clearance.
The Union Budget 2017-18 presented in February had announced the proposal for abolition of FIPB.
He also said that in the case of the 11 sectors that need prior approval for FDI, these would now be given by the ministries concerned. Wherever there are security considerations, the Home Minister's approval would also be taken, he added.
