Union cabinet discards FIPB, clears Rs 5000 cr FDI

The Union cabinet recommended clearance of Rs 5,000 crores for foreign direct investment (FDI) on Thursday after dismantling the Foreign Investment Promotion Board (FIPB).

Now, only 11 sectors will need government approval for FDI and the concerned ministry or department will have the power to clear the FDI proposal.

Defence and retail trading are the sectors that are under approval route for FDI.

In single-brand retail, civil aviation, airports, pharmaceuticals, animal husbandry and food products, the government had relaxed the FDI norms which meant that these sectors did not need FIPB’s approval from June 2016.

The government might ease the FDI norms further for few more sectors after the abolition  of the FIPB. Also, there might be an increase in the limit of FDI in print news from the current 26 per cent to 49 per cent and single brand retail can be on brought on the automatic route.  

FIPB was established in 1990s under the Prime Minister office and was transferred to Ministry of Commerce's Department of Industrial Policy and Promotion in 1996. In 2003, it was transferred to Ministry of Finance's Department of Economic Affairs.