In a bid to simplify the Foreign Direct Investment policy the Union Commerce and Industry Ministry on 1 April 2010 unveiled a comprehensive policy document that consolidates all policies on foreign direct investment, including as many as 178 Press Notes issued in the past.

The move is aimed at assimilation of all previous regulations on FDI, contained in Foreign Exchange Management Act, RBI circulars, and various Press Notes into one consolidated document, so as to reflect the current regulatory framework. Also, a single policy platform means easing the regulatory burden for government. From 1 April 2010, every six months the procedural rules will be subject to review.

The Commerce and Industry Minister Anand Sharma stated that the policy will be updated every six months by the Department of Industrial Policy and Promotion (DIPP) with the help of the Federation of Indian Chambers of Commerce and Industry (FICCI).

To expedite the FDI clearing process, the Union government further liberalised the procedures. As per the revised FDI rules, proposals up to Rs 1,200 crore foreign equity will now be cleared by the Union Finance Minister without seeking approval of the CCEA.

The recommendations of FIPB on proposals with total foreign equity inflow of more than Rs 1,200 crore will be placed for consideration with the CCEA. Earlier, proposals with total investment of up to Rs. 600 crore were considered by the Finance Minister and those exceeding this amount, by the CCEA.The FIPB Secretariat in Department of Economic Affairs will process the recommendations of FIPB to obtain the approval of Union Minister of Finance and the CCEA. The CCEA will also consider the proposals which may be referred to it by the FIPB/ the Union Minister of Finance.

Further, introducing a major reforms measure, it has been decided that companies need not require fresh approvals from the government/FIPB in sectors which have been transferred to the automatic route or where FDI caps have been removed and also for additional investment. With the policy relaxation, the foreign companies will not be required to obtain no-objection certificates (NOCs) from domestic firms for a second time for raising investment in the ongoing projects.

Fall in FDI inflows in January 2010: 

In January 2010, India received FDI inflows worth $2,042 million (approx Rs 9,086.9 crore) which is 25 per cent less than such inflows observed in the corresponding month of 2009. In January 2009, FDI inflows stood at $2,733 million (approx Rs 12,161.85). 

FDI Clearances:

The Union Government on 29 March 2010 approved 23 FDI proposals amounting to around Rs 2,325.21 crore.

The highest FDI proposal to infuse Rs 1,142.21 crore into Tikona Digital Network through the sale of convertible debentures and shares was followed by Bharat Forge's proposal to raise Rs 576 crore by issuing warrants to overseas investors and Opto Circuits' proposal to gain Rs 376.27 crore from convertible warrants issue.

In all, the government rejected six FDI proposals and deferred decision on eight. The rejected proposals include that of Visa Infrastructure, Issar Pharmaceuticals and Forum Ventures. The government has deferred proposals of Essar Capital Holding, Verizon Communications and Etisalat DB Telecom, Telecordia Technologies Inc.