Investment Procedures Relaxed

The import of capital goods will, however, continue to be governed by the provisions of the Exim policy.

The existing ceiling of Rs 1 crore payable as a lumpsum fee for automatic approvals has now been raised to $2 million.

All other terms and conditions for automatic approval notified earlier will remain unchanged, a media release said.

Both these measures are expected to facilitate increased flows of foreign technology and equity and attract prospective investors.

Earlier, foreign investments used to be governed by two norms other than the provision of automatic approval by the Reserve Bank of India of upto 51 per cent in 35 industries.

 

These conditions were that foreign equity should cover the foreign exchange needs for the import of capital goods for the project and that plant and machinery should be new and not second hand. The FIPB has already started to clear project proposals with second hand machinery.

For foreign technology collaboration proposals, automatic approval for all industries is accorded by RBI where payment of lumpsum fee is up to Rs 1 crore.