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The government will go in for major changes in the Foreign Direct Investment (FDI) regime next month but the focus this time would be on simplification of procedures and administration, rather than a tweak in the investment caps.
The Department for Promotion of Industry and Internal Trade (DPIIT) has begun its exercise on preparing guidelines to smoothen the clearance procedures and fine tune regulations.
"We are working on updating our standard operating procedure (SOP) for fast tracking of FDI proposals and better administration of FDI regime," a top government official said, adding that the changes would be announced soon.
The official added that proposals to fine tune the existing FDI regime across diverse sectors had already carried earlier and very little remains by way of making changes in the FDI caps.
"So, it's time to do what will make investing in India easier as that would ultimately decide how we perform on the FDI front," the official said.
Among the changes being looked is reducing the timeline for approval of FDI proposals, setting up sector-specific facilitation desks both in India and in Indian missions abroad, reduced paperwork, and faster procedure for security clearance in sectors that require such approval.
The government had already set up an empowered Group of Secretaries to fast track clearances for investment proposals while a Project Development Cell is now proposed to be set up in each ministry to prepare investible projects and coordinate with investors and Central and the state governments.
The government is revamping investment procedures to maintain the FDI momentum.
Despite Covid-19 disruptions and shrinking of economic activities globally, India attracted $35.37 billion worth of FDI in the April-August period of the current fiscal. This is the highest ever FDI recorded during the period in any of the previous years.
After abolishing the Foreign Investment Promotion Board in 2017, a set of SOPs for FDI regime were announced to facilitate investment. No changes have been made in procedures since then. The fresh overhaul would take a leaf out from the previous rules and regulations to make investment processes smoother going ahead.