Ministry of Commerce and Industry has issued an updated Standard Operating Procedure for the processing of Foreign Direct Investment proposals

Ministry of Commerce and Industry has issued an updated Standard Operating Procedure for the processing of Foreign Direct Investment proposals

Ministry of Commerce and Industry has issued an updated Standard Operating Procedure (SOP) for processing Foreign Direct Investment (FDI) proposals to make the approval process faster, transparent, paperless, and time-bound.

Updated Standard Operating Procedure (SOP)

¨     Nodal Agency: The Department for Promotion of Industry and Internal Trade (DPIIT) is the nodal body for processing FDI proposals.

¨     Fully Digital Process: All FDI applications must be filed online through the Foreign Investment Facilitation (FIF) Portal or National Single Window System (NSWS).

¨     No physical documents are required.

¨     Time-Bound Approval Mechanism: Maximum processing timeline fixed at 12 weeks (earlier 10 weeks under the 2017 SOP).

¨     Time taken by applicants to provide additional information is excluded.

¨     Processing Timeline: DPIIT will assign proposals to the concerned ministry within 2 days.

¨     Ministries, RBI, MHA, and MEA will conduct scrutiny and provide comments within prescribed timelines.

¨     If comments are not received in time, it will be presumed that there are “no comments”.

Security Clearance by MHA: Mandatory for investments in sensitive sectors such as:

¨     Defence

¨     Telecommunications

¨     Broadcasting

¨     Civil aviation

¨     Space sector

¨     Private security agencies

¨     Titanium-bearing minerals and ores

Rules for Border-Sharing Countries: Investments from countries sharing a land border with India require security clearance.These countries are: China, Pakistan, Bangladesh, Nepal, Bhutan, Myanmar, and Afghanistan.Fast-Track Clearance for Strategic Sectors: Investments from neighbouring countries in priority sectors will be cleared within 60 days.Sectors include such as electronic components, capital goods manufacturing, advanced battery components, polysilicon wafers, and rare-earth processing.Large Investment Proposals: FDI proposals involving foreign equity inflow above ₹5,000 crore require approval from the Cabinet Committee on Economic Affairs (CCEA).