Context: Foreign Direct Investment approval
Government revised the Standard Operating Procedure (SOP) for Foreign Direct Investment (FDI) approvals, increasing the maximum processing timeline from 10 to 12 weeks.
Why Timeline Increased?
Additional time provided for:
- Security scrutiny in sensitive sectors
- Consultation with:
- Ministry of Home Affairs (MHA)
- Ministry of External Affairs (MEA)
- Reserve Bank of India (RBI)
- Sectoral regulators
- Examination of investments from neighbouring/sensitive countries
Objective: better scrutiny, coordination and transparency, not delay.
Core Changes
- Entire FDI approval process made paperless
- Applications through:
- Foreign Investment Facilitation Portal (FIFP)
- National Single Window System (NSWS)
- Fixed timelines for ministries/departments
- No response within deadline → treated as “no comments”
- Large investments require Cabinet Committee on Economic Affairs (CCEA) approval
Importance
- Improves Ease of Doing Business
- Predictable and transparent approvals
- Reduces procedural delays
- Balances investment facilitation with national security concerns
