India’s Federal Government approved dismantling the 25-year old Foreign Investment Promotion Board, in order to streamline the flow of foreign capital into the country.
By abolishing the Foreign Investment Promotion Board India’s minister for finance, Arun Jaitley, removed a layer of decision-making for foreign direct investment approvals in 11 sectors that needed prior government approval. FDI proposals can now be cleared by the ministries and departments concerned in these sectors. In sectors where the government has security concerns, the proposals will additionally be vetted by the Home Ministry.
According to the strategic partnership policy, the four sub-sectors now open to the private sector will create a pool of six Indian firms that will be accorded special status. They will seek to make submarines for the Navy, a single-engine fighter for the air force, and helicopters and armored vehicles for the army. Once the pool is created, the companies will be given the opportunity to bid for defense production orders, expected to be worth over $20 billion. reports the Economic Times.
The Department of Industrial Policy and Promotion will notify the standard operating procedure for processing applications in the next 60 days.
