The government will now approve all FDI proposals within 12 weeks, as per the updated Standard Operating Procedure (SOP) for processing Foreign Direct Investment (FDI) applications. According to the SOP, a time limit of 12 weeks has been fixed to take a decision on the proposals. This does not include the time the applicant spends in rectifying the deficiencies in the proposals or in providing additional information sought by the competent authority. In the government's 2017 SOP, a maximum time of 10 weeks was fixed for approving the proposal. As per the existing SOP, the Department for Promotion of Industry and Internal Trade (DPIIT) will also be given two additional weeks to consider those proposals which are proposed to be rejected, or where additional conditions are proposed to be imposed by the competent authority.
Purpose of SOP
DPIIT said that the objective of this SOP is to make the process of submitting FDI applications completely paperless. Therefore, applicants will not be required to submit physical copies of any documents required to process FDI proposals. DPIIT is a part of the Ministry of Commerce and Industry that deals with matters related to FDI. As per the new SOP, all applications will be sent to the Ministry of External Affairs to give their opinion/approval on investments that are coming from countries sharing land borders with India. It also says that the ministries and departments which are consulted on any proposal – which include RBI, Home Ministry and External Affairs Ministry – will have to give their opinion within the stipulated time limit. If opinions are not received within the stipulated time, it will be assumed that they have nothing to say.
Relaxation was given recently
The SOP also includes separate guidelines for investments coming from countries sharing land borders with India (China, Pakistan, Bangladesh, Nepal, Bhutan, Myanmar and Afghanistan). Last month, the government relaxed FDI rules for foreign companies whose shareholding in China/Hong Kong is up to 10 per cent (or non-controlling stake). This will enable them to invest in India under the 'Automatic Route', subject to applicable regional conditions and FDI limits. Additionally, the government has decided to grant expedited approval (within 60 days) to investors from these seven countries in certain sectors/activities.
These sectors include capital goods manufacturing (insulation items for power houses, castings and forgings, alloy steel seamless pipes and tubes, and machine tools for heavy power industries); and electronic capital goods and electronic component manufacturing (such as printed circuit boards, display modules, camera modules, electronic capacitors, resistors, speakers and microphones for ICT products). These sectors also include polysilicon wafer, advanced battery components, rare earth permanent magnets, and rare earth processing.
have to be deposited in the portal
Apart from this, it has been said that the Cabinet Committee on Economic Affairs (CCEA) will take a decision on the proposals in which the total foreign equity investment will be more than Rs 5,000 crore. Applications that require government approval will have to be submitted online through the Foreign Investment Facilitation/NSWS (National Single Window System) portal. The concerned ministries and departments will examine the proposals on the portal. Once the proposal is submitted online, DPIIT will identify the concerned Ministry and hand over the application to it within the stipulated time frame for processing and settlement. The proposal will be sent online to the RBI for comments, and applications requiring security clearance will also be sent to the Home Ministry.
declaration form will have to be submitted
It further states that if an applicant wishes to return the approval letter given to the investee company/investor, the concerned ministry may accept the same, provided the applicant submits a declaration clearly stating the reasons for the same. According to the new SOP, the time limit for submission of comments by MHA, MEA, and any other concerned ministry/RBI/regulator will be eight weeks. Commenting on this, Ajay Srivastava, Founder, Think Tank GTRI, said that this SOP will improve the 'ease of doing business' by making the FDI approval process fast, transparent and completely digital, thereby increasing investor confidence due to the tight deadlines.
things will become much easier
However, he said, the tight scrutiny and security checks between agencies mean that compliance with the rules will still remain difficult. India must go further in this direction – simplifying regulations, reducing compliance costs, and reducing the cost of doing business – to attract high-quality and long-term investment in manufacturing and advanced sectors.
During April-February 2025-26, total FDI investment in India has crossed the $88 billion mark. The previous SOP was issued on June 29, 2017. According to him, a maximum deadline of 10 weeks was fixed for approval of any FDI proposal. Foreign investment in most sectors is allowed under the 'automatic route'. Currently, around 11 sectors—including defence, broadcasting content services, print media and banks—require government approval for FDI.
-
IPL 2026: Abhishek Sharma shook Punjab in 13 balls, became number 1
-
A small yellow pimple but its benefits are so great that even big medicines fail! Must know its miraculous effects – News Himachali News Himachali
-
Amazing work of Vodka manufacturing company, made profit of Rs 179 crore in 90 days
-
Exclusively for nonveg lovers! Try ‘Chicken Vada Pav’ at home this year, the recipe is fun
-
Mother’s Day 2026: Mother’s Day is on May 10, this year give these useful and budget friendly gifts to your mother.
