No RBI approval required post FIPB approval

Gaurav Shanker    |   

As per the extant policy, FDI is allowed under the automatic route in most of industries or sectors . FDI under the automatic route does not require prior approval either by the Government of India or the RBI.

FDI under the Government or approval route requires the approval of Foreign Investment Promotion Board (FIPB). However, in some cases, post the FIPB approval, the investors also had to wait for the RBI approval for the actual FDI inflows. The FDI inflows used to happen only after the RBI approved the decisions separately under FEMA.

Since the RBI is also represented in the FIPB and consulted on each FDI decision, government has now decided to do away with any such additional approval under FEMA from RBI. The changes however are yet to be enforce and will be effective once they are notified by the RBI.

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