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FDI PROPOSALS ELIGIBLE FOR THE AUTOMATIC ROUTE ADVISED NOT TO APPLY FOR PRIOR APPROVAL

Date : 26 Dec 2005
Location : New Delhi
 

PRESS NOTE

1. Under the extant policy, FDI up to 100% is permitted under the automatic route in most sectors/activities. Similarly, automatic route is also allowed for foreign technology collaboration where the payments are within 5% for domestic sales and 8% for exports. No approval of the Government is required in such cases.

2. Only cases not covered under the automatic route need approval of the Government through the Foreign Investment Promotion Board (FIPB) or Project Approval Board (PAB) for FDI and/or Foreign Technology collaboration respectively. It has been observed that sometimes proposals are submitted for prior Government approval even though the cases are eligible for the automatic route.

3. The investors are hereby advised to access the automatic route where the policy so permits. Henceforth, whenever prior approval of the Government is sought for activities or royalty payments eligible for the automatic route, the investors would need to indicate specific reason for seeking prior Government approval while submitting their proposals.

Department of Industrial Policy & Promotion, Ministry of Commerce & Industry,

NSD/MRS