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The process of taking back government’s last remaining controls in the foreign direct investment (<keyword id="44528" type="ORGANIZATION" weightage="20" keywordseo="FDI">FDI</keyword>) framework has begun, which would result in the <keyword id="62529" type="ORGANIZATION" weightage="100" keywordseo="Foreign-Investment-Promotion-Board">Foreign Investment Promotion Board</keyword> (FIPB) being <a href="http://www.businessinsider.in/union-budget-2017-it-becomes-easy-to-invest-in-india-with-the-abolishment-of-fipb/articleshow/56913358.cms">taken down</a>, as announced by <keyword id="6355261" type="POSITION" weightage="20" keywordseo="Finance-minister">finance minister</keyword> <keyword id="42575" type="PERSON" weightage="20" keywordseo="Arun-Jaitley">Arun Jaitley</keyword> in his February 1 budget. 
 
The department of economic affairs (DEA) has passed a draft Cabinet note for inter-ministerial consultation regarding this matter, which also proposes the responsibility of all foreign investment in sectors that require prior approval will be given to the relevant administrative ministry, department or regulator. 
 
Also read: <a href="http://www.businessinsider.in/good-news-for-investors-new-and-simpler-fdi-reforms-are-coming-in-defence-telecom-and-broadcasting/articleshow/57444146.cms">Good news for investors! New and simpler FDI reforms are coming in defence, telecom and broadcasting</a> 
 
This would lead to faster approvals, eliminating the need for multiple clearances. 
 
Also, licensing for insurance, defence manufacturing or broadcast etc. would be a one-time thing, not requiring separate screening for individual orders. 
 
While DEA note prescribes a deadline for proposals to be received by the board and handheld before ministries take over, DIPP is in favour of handing over proposals immediately to ministries and departments. 
 
Also read: <a href="http://www.businessinsider.in/FDI-rises-53-in-last-two-years/articleshow/53451653.cms">FDI inflows have risen 53% over last two years, says Finance Minister</a> 
 DIPP is responsible for the FDI policy while DEA houses the FIPB and also administers the <keyword id="6368276" type="COMPANY" weightage="20" keywordseo="Foreign-exchange">Foreign Exchange</keyword> Management Act along with RBI. 
 
"We have now reached a stage where FIPB can be phased out," Jaitley had said in his budget speech. "We have therefore decided to abolish the FIPB in 2017-18." 
 
Over the last two years, there have been <a href="http://www.businessinsider.in/FDI-Reforms-a-tale-of-too-much-caution/articleshow/53617743.cms">several reforms</a> in the FDI policy, liberalising it so that <a href="http://www.businessinsider.in/government-to-attract-62-billion-investment-from-indian-and-foreign-companies/articleshow/57537469.cms">more and more investors</a> can be attracted to the country. 
 
(Image source: DreamGains)

Foreign Investment Promotion Board might be scrapped! FDI to be free of all govt controls

The central government has approved eight <keyword id="44749" type="ORGANIZATION" weightage="20" keywordseo="Foreign-Direct-Investment">foreign direct investment</keyword> (<keyword id="44528" type="ORGANIZATION" weightage="20" keywordseo="FDI">FDI</keyword>) proposals worth Rs 34.77 crore. “Based on the recommendations of <keyword id="62529" type="ORGANIZATION" weightage="20" keywordseo="Foreign-Investment-Promotion-Board">Foreign Investment Promotion Board</keyword> (<keyword id="6360345" type="ORGANIZATION" weightage="20" keywordseo="FIPB">FIPB</keyword>)...government has approved eight proposals of foreign direct investment amounting to Rs.34.77 crore approximately,” revealed an official release. 
 
UK-based CSC Computer Sciences International Operations had asked for the government’s approval to set up a limited liability partnership (LLP) worth Rs 30 crore. Proposals of Mahanagar Gas Limited, Medicamen Biotech Ltd, TutorVista Global Private Ltd, Ventura (India) Pvt Ltd, Syssmart Services LLP and Mahindra CIE Automotive Ltd also the government’s clearance. 
 “In the FIPB meeting, a proposal relating to <keyword id="131506" type="CITY" weightage="20" keywordseo="Lupin-Ltd">Lupin Ltd</keyword> was recommended for consideration of Cabinet Committee on Economic Affairs (CCEA) as the investment involved was above Rs1,200 crore,” the release stated. Decision on as many as 12 proposals, including Syngene International Ltd, India Value Fund IV, SME <keyword id="6357264" type="ORGANIZATION" weightage="20" keywordseo="capital-market">Capital Market</keyword> Corporation, SNC-Lavalin Mauritius Ltd and Verint Systems (India) Pvt Ltd, were put off.

8 FDI Proposals Worth Rs 35 Crore Gets Govt’s Nod

FIPB has adjourned its decision on <keyword id="46013" type="CITY" weightage="80" keywordseo="Kotak-Mahindra-Bank">Kotak Mahindra Bank</keyword>'s proposal for raising FII limit to 55% for a second time. 
 The <keyword id="62529" type="ORGANIZATION" weightage="60" keywordseo="Foreign-Investment-Promotion-Board">Foreign Investment Promotion Board</keyword> (FIPB) has reportedly suspended it’s verdict in the absence of any comments from the Department of Financial Services (DFS). The Finance ministry is expected to post it’s comment by end of June. 
 
Earlier, the FIPB had shelved its order on in the 217th meeting held on April 30. 
 Kotak is seeking the approval to increase its foreign investment limit. The RBI has restricted overseas investments in the private sector after foreign shareholding in hit the permissible limit after <keyword id="45373" type="COMPANY" weightage="80" keywordseo="ING-Vysya">ING Vysya</keyword> merged with Kotak Bank. 
 
(Image credit: Indiatimes)

FIPB delays Kotak Mahindra Bank's FII limit proposal again

The <keyword id="6354477" type="PERSON" weightage="80" keywordseo="Narendra-Modi">Narendra Modi</keyword> government is will push major reforms today by introducing the Insurance Amendment Bill and the <keyword id="4625796" type="PERSON" weightage="100" keywordseo="Sebi-Act">Sebi Act</keyword> in the Parliament. The Sebi Act would provide more teeth to the market regulator. 
 The <keyword id="68997" type="UNKNOWN" weightage="100" keywordseo="insurance-bill">Insurance Bill</keyword> seeks to increase the ceiling on foreign direct investment (<keyword id="44528" type="ORGANIZATION" weightage="100" keywordseo="FDI">FDI</keyword>) in insurance to 49% from the present 26%. 
 
Ironically, the BJP had earlier opposed raising the cap on FDI in insurance when the party was in opposition. The Congress-led UPA government had first introduced the Insurance Bill in 2008. It had also tried to introduce the bill again in 2013. 
 
The BJP-led NDA has a brute majority in the Lok Sabha and the bill will be passed easily. However, it will need the Congress' support in the Rajya Sabha, where it is in a minority. The Congress has indicated that it might support the bill. 
 
The new measures will allow insurance companies to list on stock exchanges. 
 To address concerns that Indian entities may lose control, the bill provides that the management must remain with Indian companies. Moreover, the approval of the <keyword id="62529" type="ORGANIZATION" weightage="100" keywordseo="Foreign-Investment-Promotion-Board">Foreign Investment Promotion Board</keyword> will also be required on any investment over 26%.

Insurance Bill To Be Tabled In Parliament Today

Seems like we are on track with the <keyword id="44528" type="ORGANIZATION" weightage="100" keywordseo="FDI">FDI</keyword> structuring in India. FDI is high on the list of the new <keyword id="6360789" type="ORGANIZATION" weightage="80" keywordseo="Modi-Government">Modi government</keyword> and today the <keyword id="62529" type="ORGANIZATION" weightage="100" keywordseo="Foreign-Investment-Promotion-Board">Foreign Investment Promotion Board</keyword> (FIPB) cleared a lot of FDI proposals. This comes as good news for many foreign and Indian companies as they have been waiting to get the sign off from the <keyword id="44734" type="ORGANIZATION" weightage="60" keywordseo="Indian-Government">Indian government</keyword> for the <keyword id="6362476" type="ORGANIZATION" weightage="100" keywordseo="investments">investments</keyword>. 
 The committee was handed a list of 35 proposals in various sectors and by multiple companies, out of which FIPB gave the go ahead to 21 of them. Bharti shipyard was the lucky one to get the go from the board, whereas Sistema Shyam’s request to raise foreign holdings was denied. Others who got the right to pass is <keyword id="6393116" type="CITY" weightage="80" keywordseo="Verizon">Verizon</keyword> who got 100% FDI approved, Kineco Kaman Composites India in the defence sector and ANZ capital in <keyword id="25455" type="ORGANIZATION" weightage="60" keywordseo="finance">finance</keyword> sector. 
 This should give a boost to the <keyword id="6356076" type="UNKNOWN" weightage="60" keywordseo="indian-economy">Indian economy</keyword>, which is slowly yet steadily rising. The move will also give more confidence to foreign investors. 
 
Image: Thinkstock

Indian Government Gives The Green Signal To 21 FDI Projects,
Should Bring In More Foreign Investments

<keyword id="6355261" type="POSITION" weightage="20" keywordseo="Finance-minister">Finance minister</keyword> <keyword id="42575" type="PERSON" weightage="60" keywordseo="Arun-Jaitley">Arun Jaitley</keyword> on Wednesday announced the abrogation of Foreign Investment Promotion Board (<keyword id="6360345" type="ORGANIZATION" weightage="60" keywordseo="FIPB">FIPB</keyword>), a body that clears proposals envisaging foreign investment up to Rs5,000 crore. 
 
<keyword id="44528" type="ORGANIZATION" weightage="20" keywordseo="FDI">FDI</keyword> and FIPB 
 The FIPB (Foreign Investment Promotion Board) is the designated institution which considers the FDI proposals that require government approval. It likewise concedes composite approvals involving foreign investment/technology. FIPB is situated in the Department of Economic Affairs, Ministry of <keyword id="25455" type="ORGANIZATION" weightage="60" keywordseo="finance">Finance</keyword> and the Finance Minister is in charge of the FIPB. According to the June 2016 FDI policy revision, the FIPB can give suggestions of FDI proposals below Rs 5000 crore to the Minister of Finance for consideration 
 
India is having a well-designed Foreign Direct Investment control administration. FDI is regulated through various norms. A minimum lock in period, minimum capital for investment, sectoral limits and in particular control of passage into approval/automatic route are the vital regulations. 
 
For the situation of entry regulations, FDI section is made under two classifications – automatic route and approval route. Approval from the government is compulsory for some sort of investment. For this, approval institutions are made. The Foreign Investment Promotion Board is the most imperative approval body as it can consider FDI below Rs 5000 crore. Over this sum, the Cabinet Committee on Economic Affairs is the approval authority. 
 
What FIPB does 
 
It is entirely evident that the element affirms foreign investment proposals; it additionally audits FDI strategies, investigates the implementation of various proposals passed. This, as well as take up exercises that encourage FDI into the nation, for example, establishing contracts with international organizations and furthermore inviting them to invest in India. 
 
FIPB was initially constituted under the Prime Minister's Office (PMO) in the wake of the economic progression drive of the mid 1990s. The board was reconstituted in 1996 with exchange of the FIPB to the Department of Industrial Policy and Promotion (DIPP). 
 
It was again transferred to the Department of Economic Affairs, under the ministry of finance, in 2003.

It becomes easy to invest in India with the abolishment of FIPB

The <keyword id="6354705" type="UNKNOWN" weightage="100" keywordseo="Directorate-General-of-Civil-Aviation">Directorate General of Civil Aviation</keyword> (DGCA) has dismissed the objections for granting air operator's permit (AOP) to <keyword id="477021" type="COMPANY" weightage="100" keywordseo="Tata-Singapore-Airlines">Tata-Singapore Airlines</keyword> (Tata-SIA). 
 The 51:49 joint venture (JV) between <keyword id="46894" type="PERSON" weightage="100" keywordseo="Tata-Sons">Tata Sons</keyword> and SIA is expected to launch its operations by September or October this year. The JV got go-ahead from the <keyword id="62529" type="ORGANIZATION" weightage="100" keywordseo="Foreign-Investment-Promotion-Board">Foreign Investment Promotion Board</keyword> (FIPB) in October 2013 and was awaiting AOP for launching a full-service carrier. 
 
According to the provision of the aircraft rules, a public notice was issued in May by DGCA, inviting objections/suggestions from public regarding the grant of permit to Tata-SIA. 
 
DGCA said, "A total of six representations were received through email/in writing, which included representations submitted by the Federation of Indian Airlines (FIA) and Jain objecting the grant of AOP." 
 
The objections were raised on issues pertaining to: "FDI is not permitted in greenfield airlines as per the applicable FDI Policy as the said policy was devised to inject funds in the 'existing' cash starved domestic airline companies" and "the substantial ownership and effective control does not vest in Indian nationals which is a fundamental requirement of the Schedule XI of the Aircraft Rules which also raises a grave question in relation to matters of security". 
 
"After the detailed examination of objections/issues raised in the representations, the response of Tata-SIA, and various rules and other provisions for issuance of AOP, I am of the view that the representatives have not been able to make out any case against Tata SIA Airlines Ltd, for refusing to consider its application for the grant of AOP (scheduled)," said the DGCA notice.

DGCA Approves Flight Path For Tata-Singapore Airlines

The government is likely to give nod to a higher limit of foreign direct investment (<keyword id="44528" type="ORGANIZATION" weightage="100" keywordseo="FDI">FDI</keyword>) in <keyword id="6360676" type="CITY" weightage="100" keywordseo="Railways">railways</keyword> and <keyword id="32723" type="COMPANY" weightage="100" keywordseo="Defence">defence</keyword>. However, the plan to allow FDI in e-commerce has been put on hold. 
 
FDI up to 100% would be allowed under the automatic route in railway infrastructure projects, including projects like high-speed trains, sub-urban and dedicated freight corridors under public-private partnership (PPP) mode. 
 However, in strategic border areas, companies may need prior permission from the <keyword id="1382761" type="ORGANIZATION" weightage="100" keywordseo="Foreign-Investment-and-Promotion-Board">Foreign Investment and Promotion Board</keyword> (FIPB). 
“Due to security concerns in border areas, there is a view that clearance from the ministry of home affairs should be taken,” said an official. 
 
In defence sector, the FDI limit of 26% would be raised to 49%. 
 The <keyword id="120170" type="ORGANIZATION" weightage="100" keywordseo="Cabinet-Committee-on-Economic-Affairs">Cabinet Committee on Economic Affairs</keyword> has already approved 49% FDI in the insurance sector. 
 
But the government is unlikely to allow FDI in e-commerce as of now as it is of the view that it could impact domestic players.

FDI In Defence, Railways To Be Increased

Shares of the <keyword id="6384816" type="COMPANY" weightage="100" keywordseo="realty">realty</keyword> and construction companies surged today, following the relaxation of foreign direct investment (<keyword id="44528" type="ORGANIZATION" weightage="80" keywordseo="FDI">FDI</keyword>) rules. The realty sub-index on the <keyword id="35140" type="CITY" weightage="60" keywordseo="BSE">BSE</keyword> jumped 2% in early trade, outperforming the broader sensex that traded flat. 
 As per the new rules, clearance from the Foreign Investment Promotion Board (<keyword id="6360345" type="ORGANIZATION" weightage="80" keywordseo="FIPB">FIPB</keyword>) will no longer be required, making it easier for foreign companies to invest in the country. The ‘minimum built area’ for projects in which foreign investment is allowed has also been reduced to 20,000 square metres from the existing 50,000. 
 
The government has also reduced the minimum capital investment by foreign companies to $5 million from $10 million. 
 
The Centre intends to attract investments in the construction sector to fulfil Prime Minister Narendra Modi's promise to create 100 ‘smart cities’ by 2020. 
 The new rules will promote development of smaller projects, especially in urban areas where the availability of land is limited, said Akash Gupt, executive director at <keyword id="66728" type="CITY" weightage="80" keywordseo="PricewaterhouseCoopers">PricewaterhouseCoopers</keyword>. 
Image: Thinkstock

Realty
Stocks Surge After FDI Relaxation

Prime Minister Narendra Modi intervened to end the battle between the department of industrial policy and promotion (<keyword id="6391107" type="ORGANIZATION" weightage="100" keywordseo="DIPP">DIPP</keyword>) and the <keyword id="47209" type="ORGANIZATION" weightage="80" keywordseo="Finance-Ministry">Finance Ministry</keyword> to exercise control over the Foreign Investment Promotion Board (<keyword id="6360345" type="ORGANIZATION" weightage="100" keywordseo="FIPB">FIPB</keyword>). 
 
DIPP, at present, is a part of the Ministry of Commerce and Industry. "It has been decided that FIPB will remain with the Finance Ministry," a senior government official said. The Modi government wants to ensure that the policy regime encourages foreign investors to invest in the country. 
 In order to ensure effective coordination between ministries, Modi had given <keyword id="129243" type="PERSON" weightage="60" keywordseo="Nirmala-Sitharaman">Nirmala Sitharaman</keyword> independent charge of commerce and industry and also made her the Minister of State for Finance and Corporate Affairs. DIPP had asked for moving FIPB back into its fold after the Modi government took charge. 
 
The Department of Economic Affairs (DEA), which is a part of the Finance Ministry, had also asked for absolute control of the FIPB, including the policy on foreign direct investment.

FIPB To Remain Under Finance Ministry

To support its <a href="http://www.businessinsider.in/searchresult.cms?query=over-the-top+">over-the-top</a> (OTT) strategy in India, British internet service provider (ISP) <a href="http://www.businessinsider.in/searchresult.cms?query=New+Call+Telecom+">New Call Telecom</a> might invest around $300 million (Rs 1,920 crore) and acquire three, four new companies in the software and infrastructure segments. 
 
CEO <a href="http://www.businessinsider.in/searchresult.cms?query=Nigel+Eastwood+">Nigel Eastwood</a> told the Economic Times: "We have spent time over the last few months looking at a number of companies. We have got around eight-nine companies that we are talking to and three to four we would end up acquiring. We will be making announcements about two of them very shortly." 
 
These acquisitions will be based on the company's app plan, he said, adding “Almost all of them are India-based companies. But one of the companies that we are talking to will be an interesting play coming to India. What we are looking to acquire complementary assets." 
 New Call acquired messaging <keyword id="2996719" type="UNKNOWN" weightage="80" keywordseo="app-Nimbuzz">app Nimbuzz</keyword> and Delhi-based <keyword id="2997292" type="UNKNOWN" weightage="80" keywordseo="Wi-Fi-Ozone-Networks">Wi-Fi Ozone Networks</keyword> in 2014. The British company also held discussions with a number of fixed-line broadband companies, but the negotiations failed due to valuation issues. 
 
Regarding investments, he said, "We see investors now really warming toward what we are doing and really validating the opportunities. We have gone way beyond our initial expectations because that was just seed capital. And, we have got enough capital for what we want to do." 
 
Eastwood said the company is no longer actively hunting for a fixed line company as its strategically focused on the OTT plan. 
 
New Call is consolidating India operations from its office in <a href="http://www.businessinsider.in/searchresult.cms?query=Gurgaon">Gurgaon</a>. It will be hiring 100 people in the next six to 12 months to support the operations of all three companies. 
 
"We are acquiring other businesses and incubating new ideas and that's why we need people. That's my vision behind growing our business in India (and) getting behind the Digital India initiative," Eastwood said. 
 New Call's acquisition of <keyword id="2612209" type="UNKNOWN" weightage="60" keywordseo="Ozone-Networks">Ozone Networks</keyword> is awaiting <a href="http://www.businessinsider.in/searchresult.cms?query=Foreign+Investment+Promotion+Board+">Foreign Investment Promotion Board</a> (FIPB) approval. The application has been deferred a number of times. 
 
(Image: Indiatimes)

Here is why New Call Telecom is considering investing Rs 1,920-crore in India

The <a href="http://www.businessinsider.in/searchresult.cms?query=foreign+direct+investment">foreign direct investment (FDI) </a>in private sector banks might go up by 100%. The matter is now being discussed by the <keyword id="156153" type="ORGANIZATION" weightage="20" keywordseo="Ministry-of-Finance">Ministry of Finance</keyword>, the <a href="http://www.businessinsider.in/searchresult.cms?query=DIPP">department of industrial policy &amp; promotion (DIPP)</a> and the <a href="http://www.businessinsider.in/searchresult.cms?query=RBI">Reserve Bank of India (RBI).</a> 
 As published in an Economic Times report, <keyword id="6653" type="CITY" weightage="20" keywordseo="ICICI-bank">ICICI Bank</keyword>, <a href="http://www.businessinsider.in/searchresult.cms?query=HDFC+">HDFC Bank </a>and other private sector banks might become fully foreign-owned entities, with an aim to raise investments from overseas. 
 
The move will come in connection to the government’s aim of fetching more and more foreign direct investment and open up key sectors for overseas participation. 
 ICICI Bank, as believed by the Reserve <keyword id="6355303" type="CITY" weightage="20" keywordseo="Bank-of-India">Bank of India</keyword>, is one among the two of India’s most systemically important banks. The other one being government-owned <keyword id="6354731" type="CITY" weightage="20" keywordseo="State-Bank-Of-India">State Bank of India</keyword>. 
 Currently, the <keyword id="44528" type="ORGANIZATION" weightage="20" keywordseo="FDI">FDI</keyword> limit is 74% out of which, 49% is allowed automatically and the rest needs to be approved by the Foreign Investment Promotion Board (FIPB). 
 
According to the officials, who requested anonymity, "The MoF response is still awaited but it is likely they will agree. Any decision will be taken after there is an agreement between all stakeholders." 
 What the industry experts are talking of is the solution that the additional 26% increase be subjected to the approval route. Allowing an increase to the maximum will provide room for further overseas investment, given that this is already close to the 74% limit in <keyword id="6357149" type="CITY" weightage="20" keywordseo="HDFC-bank">HDFC Bank</keyword>, the country's biggest private bank by market capitalisation. While in ICICI Bank, it’s about 70%. 
 Establishing foreign banks to set up wholly-owned subsidiaries in India could also be considered. It would then follow that private sector banks that are majority foreign owned can be 100% overseas held subject to safeguards. Abolishing the limit may help persuade foreign banks to set up local units as the <keyword id="30067" type="ORGANIZATION" weightage="20" keywordseo="RBI">RBI</keyword> wants. 
 
"This may further give India the leverage to push foreign banks to open wholly-owned subsidiaries in the country," said the official. So far, only four foreign banks have applied to the RBI seeking approval for wholly-owned subsidiaries. The idea is that once they do this, such banks would be treated on par with local ones. 
 
In July, the government approved a composite cap policy for foreign investment, implying that there will be no sub-limit within the overall overseas ceiling for any particular investor category. 
 
However, in the case of private banks, the specific sub cap of 49% on foreign portfolio investment remains given concerns over volatile flows into and out of sectors that are critical to the economy. 
Image: indiatimes

You Searched For "Foreign Investment Promotion Board" and got 12 results

Foreign Investment Promotion Board might be scrapped! FDI to be free of all govt controls

BI India Bureau

8 FDI Proposals Worth Rs 35 Crore Gets Govt’s Nod

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FIPB delays Kotak Mahindra Bank's FII limit proposal again

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Insurance Bill To Be Tabled In Parliament Today

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Indian Government Gives The Green Signal To 21 FDI Projects, Should Bring In More Foreign Investments

Sulabh Puri

It becomes easy to invest in India with the abolishment of FIPB

Gaurav Sangwani

DGCA Approves Flight Path For Tata-Singapore Airlines

BI India Bureau

FDI In Defence, Railways To Be Increased

BI India Bureau

Realty Stocks Surge After FDI Relaxation

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FIPB To Remain Under Finance Ministry

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Here is why New Call Telecom is considering investing Rs 1,920-crore in India

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Some of India’s top Pvt Banks could soon lose their ‘Indian’ status

BI India Bureau

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