Indian Govt's Abolition of FIPB Will Help Spur Up Foreign Investments

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Finance Minister Mr. Arun Jaitley today announced the abolition of the Foreign Investment Promotion Board as he presented the Union Budget for 2017-18.


The Foreign Investment Promotion Board (FIPB) offers a single window clearance for applications on Foreign Direct Investment (FDI) in India that are under the approval route. The sectors under automatic route do not require any prior approval from FIPB and are subject to only sectoral laws. This e-filing facility is an important initiative of the FIPB Secretariat to further enhance its efficiency and transparency of decision making.

Industry experts and investors gave thumbs up to this initiative and said that this will simplify the inflow of foreign funds into the country.

Abolition of FIPB would mean no need to seek approval for foreign investment in country. This would help in speeding the foreign investment as direct investment. However I believe that there would be some negative list for which approval will be needed. Overall abolition of FIPB would help in reducing lot of paper work and approvals for seeking foreign investments and will also reduce time, Anil Joshi of Unicorn India Ventures.

Good for startups

Arun Jaitley further added that they are trying to liberalize the norms under Foreign Direct Investment.

Startups, which had seen a dent in funding from investors last year, this move comes as a ray of hope as foreign investors will now find it easier to make investments in India.

I believe the abolition of FIPB and making foreign investments approvals less subjective will send the right signal to the multitude of investors looking at India as the next big growth story after China. This will certainly give impetus to investments in Indian fast growth startups, Anil Chhikara, Principal, Jaarvis Accelerator said.

Nithin Kamath, Founder & CEO, Zerodha said that scrapping of 'Foreign Investment Promotion Board' further proves that the Central Government is pro business and investments.

The FIPB was reconstituted in 1996 with transfer of the FIPB to the Department of Industrial Policy and Promotion (DIPP). It was again transferred to the Department of Economic Affairs, under the Ministry of Finance, in 2003.