DIPP working on aligning FDI policy with NIC code

New Delhi: With a view to improve the ease of doing business, the Commerce and Industry Ministry is working on a proposal to indicate applicability of FDI policy against each entry in National Industrial Classification (NIC) Code.

The government has put in place a liberal policy for FDI under which FDI up to 100 percent is permitted through the automatic route in most of the sectors/activities but some sectors require prior government approval for infusing FDI with sector specific conditions, the DIPP said today.

In the last one year, the Department of Industrial Policy and Promotion (DIPP) embarked upon a number of initiatives with the objective of improving ease of doing business and simplifying the investment process.

"Further, in this regard, the DIPP has now initiated an exercise for preparation of identifying applicability of the FDI policy para as per each identified activity provided in NIC Code 2008 to provide greater clarity and simplicity to foreign investors," it said.

"Under this exercise, codification had been started off with the NIC-2008 code book indicating against each entry as to whether FDI is allowed therein, and if so, it is on automatic or approval route along with para number of FDI policy," it said.

The department has prepared a draft list prepared in this regard and it has sought comments and suggestions from the stakeholders and investors on this latest by November 20.

All the economic activities are classified as per the NIC Code. The classification is necessary for seeking industrial licenses and submitting industrial entrepreneurs memorandum.

The code classify business activities and help the industry in seeking policy approvals for specific activities.

The DIPP, which is under the Ministry of Commerce and Industry, is the nodal agency on FDI policy. It compiles all policies related to India's FDI regime into a single document to make it simple and easy for investors to understand.

FDI inflows during April-June of the current financial year grew by 31 percent to USD 9.50 billion from USD 7.23 billion in the same period a year earlier.

India now ranks 130th out of 189 countries in the ease of doing business, moving up 12 places from last year, according to the World Bank report 'Doing Business 2016'.