{"id":30071,"date":"2020-03-30T13:41:07","date_gmt":"2020-03-30T08:11:07","guid":{"rendered":"https:\/\/enterslice.com\/learning\/?p=30071"},"modified":"2020-03-30T13:41:10","modified_gmt":"2020-03-30T08:11:10","slug":"government-approval-under-foreign-direct-investment-fdi-in-india","status":"publish","type":"post","link":"https:\/\/enterslice.com\/learning\/government-approval-under-foreign-direct-investment-fdi-in-india\/","title":{"rendered":"Government Approval under Foreign Direct Investment (FDI) In India"},"content":{"rendered":"<p class=\"has-drop-cap\">In the current economic scenario, there is no country that is left out from the impact of globalization, and every country is dependent on each other to form a strong global economy. Foreign Direct Investment has become an important source for private external finance and is always welcomed by the regulators. That is why the policy related to <strong><a href=\"https:\/\/enterslice.com\/learning\/types-foreign-investment-india\/\">Foreign Direct Investment<\/a><\/strong> (FDI) in India has been liberalized and most of the sectors have been allowed under the automatic route. There are only a few sectors which are not under automatic route and required the approval from the government.<\/p>\n\n\n\n<p><strong>Let us understand in detail about the automatic route and approval route for FDI in India.<\/strong><\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Routes under Foreign Direct Investment (FDI) in India<\/h2>\n\n\n\n<p>Investment in the form of FDI can be made in the\nfollowing ways in India:<\/p>\n\n\n\n<p>Automatic Route: Prior approval is not required from\nReserve Bank of India or Government of India for the activities\/ Sectors\nmentioned under Regulation 16 of FEMA 20(R). <\/p>\n\n\n\n<p>Government Route: Prior approval is required from the\nGovernment of India or Reserve Bank of India. Activities\/ Sectors which are not\ncovered under the automatic route, are covered under the Government route.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Foreign Direct Investment Policy: Sectors Where Government Approval Is Required<\/h2>\n\n\n\n<table class=\"wp-block-table\"><tbody><tr><td>\n  S.No.\n  <\/td><td>\n  Sector\/Activity\n  <\/td><td>\n  Cap\n  <\/td><td>\n  Government Approval\n  <\/td><\/tr><tr><td>\n  1\n  <\/td><td>\n  Mining\n  and Mineral Separation of titanium bearing minerals and ores\n  <\/td><td>\n  100%\n  <\/td><td>\n  Up to 100%\n  <\/td><\/tr><tr><td>\n  2\n  <\/td><td>\n  Food\n  Product Retail Trading\n  <\/td><td>\n  100%\n  <\/td><td>\n  Up to 100%\n  <\/td><\/tr><tr><td>\n  3\n  <\/td><td>\n  Defence\n  <\/td><td>\n  100%\n  <\/td><td>\n  Beyond 49%\n  <\/td><\/tr><tr><td>\n  4\n  <\/td><td>\n  Publishing\/printing\n  of scientific and technical magazines\/speciality\n  <\/td><td>\n  100%\n  <\/td><td>\n  Up to 100%\n  <\/td><\/tr><tr><td>\n  journals\/\n  periodicals\n  <\/td><\/tr><tr><td>\n  5\n  <\/td><td>\n  Publication\n  of facsimile edition of foreign newspaper\n  <\/td><td>\n  100%\n  <\/td><td>\n  Up to 100%\n  <\/td><\/tr><tr><td>\n  6\n  <\/td><td>\n  Print\n  Media &ndash; Publishing of newspaper and periodicals dealing with news and current\n  affairs\n  <\/td><td>\n  26%\n  <\/td><td>\n  Up to 100%\n  <\/td><\/tr><tr><td>\n  7\n  <\/td><td>\n  Print\n  Media &ndash; Publication of newspaper and periodicals dealing with news and\n  current affairs\n  <\/td><td>\n  26%\n  <\/td><td>\n  Up to 26%\n  <\/td><\/tr><tr><td>\n  8\n  <\/td><td>\n  Air\n  Transport Service &ndash; Scheduled, and Regional Air Transport Service\n  <\/td><td>\n  100%\n  <\/td><td>\n  Beyond 49%\n  <\/td><\/tr><tr><td>\n  9\n  <\/td><td>\n  Investment\n  by Foreign Airlines\n  <\/td><td>\n  100%\n  <\/td><td>\n  Up to 49%\n  <\/td><\/tr><tr><td>\n  10\n  <\/td><td>\n  Satellites-\n  establishment and operation\n  <\/td><td>\n  100%\n  <\/td><td>\n  Up to 100%\n  <\/td><\/tr><tr><td>\n  11\n  <\/td><td>\n  Telecom\n  Services\n  <\/td><td>\n  100%\n  <\/td><td>\n  Beyond 49%\n  <\/td><\/tr><tr><td>\n  12\n  <\/td><td>\n  Pharmaceutical\n  Brownfield\n  <\/td><td>\n  100%\n  <\/td><td>\n  Beyond 74%\n  <\/td><\/tr><tr><td>\n  13\n  <\/td><td>\n  Banking-Private\n  Sector\n  <\/td><td>\n  74%\n  <\/td><td>\n  Beyond 49%\n  <\/td><\/tr><tr><td>\n  14\n  <\/td><td>\n  Banking-Public\n  Sector\n  <\/td><td>\n  20%\n  <\/td><td>\n  Up to 20%\n  <\/td><\/tr><tr><td>\n  15\n  <\/td><td>\n  Private\n  Security Agencies\n  <\/td><td>\n  74%\n  <\/td><td>\n  Beyond 49%\n  <\/td><\/tr><tr><td>\n  16\n  <\/td><td>\n  Broadcasting\n  Content Service\n  <\/td><td>\n  49%\n  <\/td><td>\n  Up to 49%\n  <\/td><\/tr><tr><td>   1. FM Radio   <\/td><\/tr><tr><td>   2. Up linking of &lsquo;News &amp; Current Affairs&rsquo; TV   Channels   <\/td><\/tr><tr><td>\n  17\n  <\/td><td>\n  Trading\n  &ndash; MBRT\n  <\/td><td>\n  51%\n  <\/td><td>\n  Up to 51%\n  <\/td><\/tr><\/tbody><\/table>\n\n\n\n<h3 class=\"wp-block-heading\">Prohibited Sectors<\/h3>\n\n\n\n<ul><li>Gambling and betting; <\/li><li>Lottery Business, <\/li><li>Atomic Energy <\/li><li>Retail Trading <\/li><li>Plantation activities\nor Agricultural (excluding Floriculture, Horticulture, Development of Seeds,\nAnimal Husbandry, Pisciculture and Cultivation of Vegetables, Mushrooms etc.\nunder controlled conditions and services related to agro and allied sectors) and\nPlantations (other than Tea plantations) <\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\">Procedure of FDI in India under Government Approval <\/h2>\n\n\n\n<p>File online Application with Foreign Investment\nFacilitation Portal (FIFP), formerly known as Foreign Investment Promotion\nBoard. FIFP is the new online single point interference of Government of India\nto facilitate Foreign Direct Investment. This Portal is administered by the\nDepartment for Promotion of Industry and Internal trade.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Steps involved in it:<\/h3>\n\n\n\n<ol><li>Register on the Portal provided by the\nForeign Investment Facilitation Portal, DIPP, and Ministry of Commerce. <\/li><li>OTP will be generated on mobile and\nEmail ID for the verification.<\/li><li>After OTP, details of login and\nweblink to generate the password will be sent to the registered mobile or email\nID.<\/li><li>After Login, Online Application shall\nbe filed with the mentioned documents of Investor and Investee company as per Standard\nOperation Procedure (SOP):<\/li><\/ol>\n\n\n\n<p><b>Also, Read:<\/b> <mark><a href=\"https:\/\/enterslice.com\/learning\/foreign-direct-investment-fema-rbi-compliances-checklist\/\" target=\"_blank\" rel=\"noopener noreferrer\">FEMA\/ RBI Compliances Checklist: Foreign Direct Investment<\/a><\/mark>.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Documents Required:<\/h3>\n\n\n\n<ol><li>Summary of Proposal on Company\n(Applicant) Letterhead. <\/li><li>Certificate of Incorporation (COI) of\nthe Investee &amp; Investor Companies\/ Entities.<\/li><li>Memorandum of Association (MOA) <\/li><li>Board Resolution&nbsp; <\/li><li>Audited Financial Statement of the\nLast Financial Year<\/li><li>Article of Association<\/li><li>Names and address of foreign\ncollaborators along with Passport and Identification Proof.<\/li><li>Flow chart presentation of the flow of\nfunds from the original investor to the investee company <\/li><li>Pre and Post -shareholding pattern of\nthe Investee Company.<\/li><li>An\naffidavit stating that all information provided in hard copy and online are the\nsame and correct.<\/li><\/ol>\n\n\n\n<p>After online Application, DIPP will identify the concerned\nAdministrative department for the same and will transfer the case to the\nrelevant department.<\/p>\n\n\n\n<p><em><strong>Concerned Departments:<\/strong><\/em><\/p>\n\n\n\n<table class=\"wp-block-table\"><tbody><tr><td>\n  S.No.\n  <\/td><td>\n  Activity\/ sector\n  <\/td><td>\n  Administrative Ministry\/ Department\n  <\/td><\/tr><tr><td>\n  (i)\n  <\/td><td>\n  Mining\n  <\/td><td>\n  Ministry of Mines\n  <\/td><\/tr><tr><td>\n  (ii)\n  <\/td><td>\n  Defence\n  <\/td><td>\n  Ministry of Mines\n  &nbsp;\n  <\/td><\/tr><tr><td>\n  a) Items requiring Industrial Licence under the Industries\n  (Development &amp; Regulation) Act, 1951, and\/or Arms Act, 1959 for which the\n  powers have been delegated by Ministry of Home Affairs to DIPP\n  <\/td><td>\n  Department of Defence Production, Ministry of Defence\n  <\/td><\/tr><tr><td>\n  b) Manufacturing of Small Arms and Ammunitions covered under\n  Arms Act 1959\n  <\/td><td>\n  Ministry of Home Affairs\n  <\/td><\/tr><tr><td>\n  (iii)\n  <\/td><td>\n  Broadcasting\n  <\/td><td>\n  Ministry of Information &amp; Broadcasting\n  <\/td><\/tr><tr><td>\n  iv)\n  <\/td><td>\n  Print Media\n  <\/td><\/tr><tr><td>\n  (v)\n  <\/td><td>\n  Civil Aviation\n  <\/td><td>\n  Ministry of Civil Aviation\n  <\/td><\/tr><tr><td>\n  (vi)\n  <\/td><td>\n  Satellites\n  <\/td><td>\n  Department of Space\n  <\/td><\/tr><tr><td>\n  (vii)\n  <\/td><td>\n  Telecommunication\n  <\/td><td>\n  Department of Telecommunications\n  <\/td><\/tr><tr><td>\n  (viii)\n  <\/td><td>\n  Private Security Agencies\n  <\/td><td>\n  Ministry of Home Affairs\n  <\/td><\/tr><tr><td>\n  (ix)\n  <\/td><td>\n  Applications involving investments from <em>Countries of Concern <\/em>which\n  presently include Pakistan and Bangladesh, requiring security clearance as\n  per the extant FEMA 20, FDI Policy and security guidelines, amended from time\n  to time\n  <\/td><\/tr><tr><td>\n  (x)\n  <\/td><td>\n  Trading (Single brand, Multi brand and Food Product retail\n  trading)\n  <\/td><td>\n  Department of Industrial Policy &amp; Promotion\n  <\/td><\/tr><tr><td>\n  (xi)\n  <\/td><td>\n  FDI proposals by Non-Resident Indians (NRIs)\/ Export Oriented\n  Units requiring approval of the Government\n  <\/td><\/tr><tr><td>\n  (xiv)\n  <\/td><td>\n  Financial services activity which are not regulated by any\n  Financial Sector Regulator or where only part of the financial services\n  activity is regulated or where there is doubt regarding the regulatory\n  oversight\n  <\/td><td>\n  Department of Economic Affairs\n  <\/td><\/tr><tr><td>\n  (xv)\n  <\/td><td>\n  Applications for foreign investment into a Core Investment\n  Company or an Indian company engaged only in the activity of investing in the\n  capital of other India Company\/ies\n  <\/td><\/tr><tr><td>\n  (xvi)\n  <\/td><td>\n  Banking (Public and Private)\n  <\/td><td>\n  Department of Financial Services\n  <\/td><\/tr><\/tbody><\/table>\n\n\n\n<p>Physical submission of the Application needs to be made within\nfive days of the communication received from DIPP to the concerned department,\nIf the Application is digitally signed, then there is no need to submit the\nphysical application.<\/p>\n\n\n\n<p>Once the documents are received by the concerned authority, the\ndepartment conducts the preliminary investigation of the documents within one\nweek of receiving them. <\/p>\n\n\n\n<p>Other departments give their comments, if any, within two\/ four\/\nsix weeks as specified under the regulation to the concerned authority. The concerned\nAuthority, after receiving the comments, approves or rejects the application\nwithin two weeks. The complete procedure takes a total of ten weeks to get the\napproval from the concerned Authority.<\/p>\n\n\n\n<p><em><strong>Explained in the Flow Chart:<\/strong><\/em><\/p>\n\n\n\n<div class=\"wp-block-image\"><figure class=\"aligncenter is-resized\"><img decoding=\"async\" loading=\"lazy\" src=\"https:\/\/enterslice.com\/learning\/wp-content\/uploads\/2020\/03\/image001.png\" alt=\"flowchart of fdn in india\" class=\"wp-image-30073\" width=\"511\" height=\"624\" srcset=\"https:\/\/enterslice.com\/learning\/wp-content\/uploads\/2020\/03\/image001.png 436w, https:\/\/enterslice.com\/learning\/wp-content\/uploads\/2020\/03\/image001-246x300.png 246w\" sizes=\"(max-width: 511px) 100vw, 511px\"\/><\/figure><\/div>\n\n\n\n<div class=\"wp-block-image\"><figure class=\"aligncenter is-resized\"><img decoding=\"async\" loading=\"lazy\" src=\"https:\/\/enterslice.com\/learning\/wp-content\/uploads\/2020\/03\/image002.png\" alt=\"flowchart of fdn in india\" class=\"wp-image-30074\" width=\"650\" height=\"348\" srcset=\"https:\/\/enterslice.com\/learning\/wp-content\/uploads\/2020\/03\/image002.png 443w, https:\/\/enterslice.com\/learning\/wp-content\/uploads\/2020\/03\/image002-300x160.png 300w\" sizes=\"(max-width: 650px) 100vw, 650px\"\/><\/figure><\/div>\n\n\n\n<h2 class=\"wp-block-heading\">Conclusion<\/h2>\n\n\n\n<p>This is a procedural matter which requires the expert advice for understanding\nthe sectors that fall under the government approval route, set of documents to\nbe produced with the department, liasoning with the department, resolving to\nthe query of the department based on a preliminary investigation, understanding\nthe requirement of the department. The inflow of capital without taking\ngovernment approval will attract the penalty for non-compliance as mentioned regulations.\nTaking Professional advice may help you in saving your time and protect you from\nthe penalties imposed in case of any errors.<\/p>\n\n\n\n<p><b>More on FDI:<\/b> <mark><a href=\"https:\/\/enterslice.com\/learning\/changes-in-fdi-rules-unlocking-investment-potential-of-nbfcs\/\" target=\"_blank\" rel=\"noopener noreferrer\">Changes in FDI Rules &ndash; Unlocking Investment Potential of NBFCs<\/a><\/mark>.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>In the current economic scenario, there is no country that is left out from the impact of globalization, and every country is dependent on each other to form a strong global economy. Foreign Direct Investment has become an important source for private external finance and is always welcomed by the regulators. That is why the [&hellip;]<\/p>\n","protected":false},"author":38,"featured_media":30077,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[1442,1329,1331],"tags":[2859],"acf":{"service_id":"210"},"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v14.6.1 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>FDI In India: Government Approval Under Foreign Direct Investment<\/title>\n<meta name=\"description\" content=\"the policy related to Foreign Direct Investment FDI in India has been liberalized and most of the sectors have been allowed under the automatic route.\" \/>\n<meta name=\"robots\" content=\"index, follow\" \/>\n<meta name=\"googlebot\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<meta name=\"bingbot\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/enterslice.com\/learning\/government-approval-under-foreign-direct-investment-fdi-in-india\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"FDI In India: Government Approval Under Foreign Direct Investment\" \/>\n<meta property=\"og:description\" content=\"the policy related to Foreign Direct Investment FDI in India has been liberalized and most of the sectors have been allowed under the automatic route.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/enterslice.com\/learning\/government-approval-under-foreign-direct-investment-fdi-in-india\/\" \/>\n<meta property=\"og:site_name\" content=\"Enterslice\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/enterslice\" \/>\n<meta property=\"article:published_time\" content=\"2020-03-30T08:11:07+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2020-03-30T08:11:10+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/enterslice.com\/learning\/wp-content\/uploads\/2020\/03\/Government-Approval-under-Foreign-Direct-Investment-FDI-In-India.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"670\" \/>\n\t<meta property=\"og:image:height\" content=\"352\" \/>\n<meta name=\"twitter:card\" content=\"summary\" \/>\n<meta name=\"twitter:creator\" content=\"@enterslice\" \/>\n<meta name=\"twitter:site\" content=\"@enterslice\" \/>\n<!-- \/ Yoast SEO plugin. -->","authorName":"Bhawna Dang","authorImageUrl":"https:\/\/enterslice.com\/learning\/wp-content\/uploads\/2020\/03\/Bhawna-Dang.png","authorDescription":"Bhawna Dang is a competent and skilled professional, holding an educational background in M. Com, Company secretaryship and LL. B. She holds ample experience of 4 years working as an Advisory Associate with a blend of corporate background. She has extensive knowledge in handling matters relating to Reserve Bank of India and has also worked on various secretarial and listing compliances of corporates.","postViews":552,"readingTime":4,"nextPost":{"id":30083,"slug":"impact-on-start-ups-business-amidst-coronavirus-covid-19"},"prevPost":{"id":30056,"slug":"foreign-direct-investment-fdi-in-nbfc-sector-in-india"},"featuredMediaUrl":"https:\/\/enterslice.com\/learning\/wp-content\/uploads\/2020\/03\/Government-Approval-under-Foreign-Direct-Investment-FDI-In-India.jpg","postTerms":"FEMA","_links":{"self":[{"href":"https:\/\/enterslice.com\/learning\/wp-json\/wp\/v2\/posts\/30071"}],"collection":[{"href":"https:\/\/enterslice.com\/learning\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/enterslice.com\/learning\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/enterslice.com\/learning\/wp-json\/wp\/v2\/users\/38"}],"replies":[{"embeddable":true,"href":"https:\/\/enterslice.com\/learning\/wp-json\/wp\/v2\/comments?post=30071"}],"version-history":[{"count":0,"href":"https:\/\/enterslice.com\/learning\/wp-json\/wp\/v2\/posts\/30071\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/enterslice.com\/learning\/wp-json\/wp\/v2\/media\/30077"}],"wp:attachment":[{"href":"https:\/\/enterslice.com\/learning\/wp-json\/wp\/v2\/media?parent=30071"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/enterslice.com\/learning\/wp-json\/wp\/v2\/categories?post=30071"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/enterslice.com\/learning\/wp-json\/wp\/v2\/tags?post=30071"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}