Foreign cos may get FIPB nod for downstream investments

NEW DELHI: The wait is over for 30 foreign firms to get foreign exchange promotion board���s (FIPB) nod for making downstream investments. The government has allowed them to escape the board and make direct investment in downstream activities by merely informing the Reserve Bank of India (RBI). So far, a foreign company operating in India needed a prior FIPB approval before taking any such decision.

But, the company will be required to inform the board, department of industrial policy and promotion (DIPP) and the secretariat for industrial assistance (SIA) about its investments within 30 days of funding the project, a senior official in the commerce and industry ministry told ET.

Last week, the government had issued an instruction (Press Note 4) doing away with the FIPB approval for downstream investments. But, it was silent on the fate of cases pending with the board. Nimbus Communications, DSR Realtors and Intertoll Consultants are some of the companies to have approached FIPB of late seeking its approval for making downstream investments.

According to Press Note 4, a foreign-owned or controlled Indian company that either runs a business or runs a business and also invests in other companies down the line will no longer have to seek clearance.