DIPP urges for an increase in FDI limit to Rs 3,000 cr

The department of industrial policy and promotion (DIPP) has submitted a draft cabinet note proposing an increase in foreign direct investment (FDI) threshold to Rs 3,000 crores from the current Rs 1,200 crores. For now, FDI proposals below the current limit in infrastructure and manufacturing sectors need Foreign Investment Promotion Board’s (FIPB) approval as well as a go ahead from the Finance Minister. And investments beyond this limit require the approval of cabinet committee on economic affairs (CCEA). Last time in 2010, this limit was doubled from Rs 600 crores to Rs 1,200 crores.

FIPB is an inter-ministerial body led by the secretary of the department of economic affairs that recommends overseas investment proposals to the finance minister for approval. If the DIPP’s proposal to raise FDI limit is accepted, the finance minister can give a nod to FDI proposals of up to Rs 3,000 crores. The government opened railways to foreign investment and increased investment limit in defence sector followed by increase in overseas investment in insurance, last week.