Most FDI bids pending since 2013, govt now eyes fast track

NEW DELHI: Days after minister of state for commerce and industry NirmalaSitharaman informed LokSabha that the Union home ministry had consented to give security nod to FDI proposals within 12 weeks, the latter has finalized draft guidelines setting this new time limit. The new FDI vetting norms, which also require intelligence agencies to submit their comments within a month, were drawn up even as the home ministry on Tuesday conceded that it had cleared no more than 50% of the FDI proposals received by it since 2013.
According to the draft guidelines, reviewed by home minister Rajnath Singh on Tuesday, any delay in FDI approval must be explained and the reasons communicated in writing by the wing where it is held up. In case the intelligence agencies need more time to gather inputs, particularly where they are seemingly adverse, they must convey this to the home ministry. The home ministry, too, will be required to share any adverse report with the ministry concerned.
The new FDI clearance norms are aimed at creating a conducive investment climate, particularly in relation to strategic sectors like telecom and aviation. As per data shared by the home ministry with Lok Sabha on Tuesday, just one of the 14 FDI proposals referred to it for security vetting this year has been cleared, with the remaining 13 awaiting comments from central agencies/departments/ministries. In fact, as many as 27 of the 42 FDI proposals moved in 2013 and three of the 36 proposals received in 2012 are still pending for want of security clearance.
A home ministry official attributed the inordinate delay in security nod for FDI largely to the failure of agencies like RAW and Intelligence Bureau to gather timely inputs on the funding pattern of the foreign investor and its operations in other countries of concern.
Incidentally, there have been demands earlier asking the home ministry to give a definite 'yes' or 'no' to an FDI proposal on security grounds, rather than only offering its adverse comments on the credentials of the applicant foreign investor. The impression is that by leaving the final view on security credentials of a foreign investor to FIPB, the home ministry was only absolving itself of any blame in the event of something adverse being found against the investor at a later stage.