Twenty-five years since its establishment, the Foreign Investment Promotion Board (FIPB) or the foreign investment regulator is about to be abolished.
On Wednesday, 24th of May, 2017, the Union Cabinet in its meeting approved the abolishment of the FIPB, which was initially established under the Prime Minister’s Office due to the emergence of liberalization in the 1990s in India.
The Foreign Investment Promotion Board (FIPB), housed in the Department of Economic Affairs, Ministry of Finance, is an inter-ministerial body, responsible for the processing of FDI proposals and making recommendations for Government approval. But, with the increase in the Foreign Direct Investments(FDIs) coming through the automatic route, the role of the FIPB has been reduced to such a level that the Ministry of Finance felt that the FIPB can be phased out.
The same was proposed by Finance Minister Arun Jaitley in the Union Budget 2017-18.
The Foreign Investment Promotion Board has successfully implemented e-filing and online processing of FDI applications. We have now reached a stage where FIPB can be phased out. We have therefore decided to abolish the FIPB in 2017-18. A roadmap for the same will be announced in the next few months.
– Finance Minster, Arun Jaitley, Union Budget 2017-18
Presently, applications are considered by FIPB in Department of Economic Affairs (DEA), Ministry of Finance comprising of various Secretaries of Government of India for making a recommendation on FDI applications. After the Cabinet decision, it would be handled independently by Administrative Ministries as per Sector.
For more information click here.
Source: First Post & Bloomberg/Quint