9.
Explanation
The Foreign Investment Promotion Board (FIPB) played a significant role in encouraging foreign investment in India until its abolition in 2017. FIPB was a government body under the Ministry of Finance that was responsible for reviewing and approving foreign direct investment (FDI) proposals in various sectors of the Indian economy. Its primary role was to facilitate and streamline the FDI approval process, making it easier for foreign investors to invest in India. The role and functions of FIPB:
1. Single-Window Clearance: FIPB acted as a single-window clearance mechanism for foreign investors. It served as a centralized authority where foreign investment proposals were submitted, reviewed, and approved or rejected.
2. Policy Interpretation: FIPB played a crucial role in interpreting India’s FDI policies and guidelines,ensuring that foreign investors understood the regulatory framework and compliance requirements.
3. Exemption and Special Approvals: In sectors where FDI was subject to certain conditions or limits, FIPB could grant exemptions or special approvals to facilitate foreign investments that might not have been possible under standard FDI rules.
4. Sectoral Review: FIPB conducted a sector-wise review of FDI proposals to assess their potential impact on the Indian economy, national security, and other relevant factors.
5. Recommendations: After evaluating each proposal, FIPB made recommendations to the government for approval or rejection. It acted as an advisory body, and its recommendations were typically accepted.
6. Coordination: FIPB worked closely with various government ministries and departments to ensure a coordinated approach to foreign investment approvals. This coordination was crucial to avoid duplicative processes and delays.
7. Speeding up Approvals: One of the primary objectives of FIPB was to expedite the approval process for FDI proposals. It aimed to reduce bureaucratic hurdles and provide a quicker turnaround time for investors.
8. Policy Updates: FIPB played a role in proposing updates and changes to India’s FDI policy framework to make it more investor-friendly and to attract foreign capital.
9. Monitoring: Once an investment was approved, FIPB monitored compliance with the conditions and requirements specified in the approval letter.
After its abolition, the responsibility for approving FDI proposals was delegated to the respective administrative ministries or departments governing specific sectors. This change was made to make the approval process more decentralized and aligned with sector-specific expertise.
Foreign investors looking to invest in India should now refer to the Department for Promotion of Industry and Internal Trade (DPIIT) and other relevant government ministries and departments for guidance on FDI approvals and compliance. While FIPB no longer exists, the Indian government continues to work on improving the ease of doing business and attracting foreign investment through various policy measures and initiatives.