The Department of Industrial Policy & Promotion (DIPP) released on August 28 its latest edition of consolidated Foreign Direct Investment Policy incorporating all the changes in rules and procedures notified by the government over the past year.
“The present consolidation subsumes and supersedes all press notes/releases/clarifications/ circulars issued by DIPP, which were in force as on August 27, 2017, and reflects the FDI Policy as on August 28, 2017,” an official notification stated.
The consolidated policy lays down the general conditions on FDI, procedures for government approval and sector specific conditions on FDI.
The policy document also includes a separate paragraph on start-ups which can raise up to 100 per cent of funds from Foreign Venture Capital Investor (FVCI) against receipt of foreign remittance.
“A start-up company engaged in a sector where foreign investment requires government approval may issue convertible notes to a nonresident only with the approval of the government,” the notification said.
The government has been continuously liberalizing FDI rules in a number of sectors including food retail, construction and development, civil aviation, defense and private security agencies.
According to government estimates, more than 90 per cent of FDI now flows into the country through the automatic route without needing clearances.