Govt Extends Deadline for FDI Approvals to 12-Week , Moves Process Fully Online

The government has revised its Standard Operating Procedure (SOP) for Foreign Direct Investment (FDI) approvals, setting a 12-week deadline for clearing proposals. The move is aimed at making the approval process faster, more transparent, and fully digital. The timeline excludes delays caused by applicants for correcting deficiencies or submitting additional details.

According to the Department for Promotion of Industry and Internal Trade (DPIIT) the "SOP aims to make the FDI application filing process completely paperless. Therefore, the applicant will not be required to file physical copies of any documents required to process FDI proposals.”

Faster Timelines, Digital Process Push

Under the new system, all FDI applications will be processed online through the National Single Window System (NSWS) or Foreign Investment Facilitation portal. Once submitted, DPIIT will assign the proposal to the concerned ministry within the set timeline.

Ministries and departments, including the Reserve Bank of India (RBI), Ministry of Home Affairs (MHA), and Ministry of External Affairs (MEA), must share their comments within the prescribed period. If no response is received in time, it will be treated as “no comments,” helping avoid delays.

The overall decision timeline has been fixed at 12 weeks, an increase from the earlier 10-week limit set in 2017. The additional time allows DPIIT to handle cases where rejection or extra conditions are proposed.

Security Checks and Sensitive Investments

Investments from countries sharing a land border with India will continue to require additional scrutiny. These include China, Pakistan, Bangladesh, Nepal, Bhutan, Myanmar, and Afghanistan.

Such proposals will be referred to the Ministry of External Affairs for review, and in certain cases, the Ministry of Home Affairs will also be consulted. The government has also introduced a faster 60-day approval route for investors from these countries in select sectors such as electronics manufacturing, capital goods, rare earth processing, and advanced battery components.

For large investments exceeding ₹5,000 crore, approval will be taken up by the Cabinet Committee on Economic Affairs (CCEA), ensuring higher-level review for big-ticket proposals.

GTRI Founder Ajay Srivastava said the new SOP will improve ease of doing business by making FDI approvals faster, transparent, and fully digital. He said, “The SOP will improve ease of doing business by making FDI approvals faster, transparent, and fully digital, with clear timelines boosting investor confidence.”

He added that while the move is positive, compliance requirements will remain strict due to strong inter-agency scrutiny. Srivastava said, “While a welcome step, India must go further—simplifying regulations, cutting compliance costs, and reducing the cost of doing business—to attract high-quality, long-term investment into manufacturing and advanced sectors.”

Streamlined Review System

The revised SOP also sets an eight-week deadline for ministries and regulators to provide comments. This includes RBI and other sectoral regulators involved in the approval process. The aim is to reduce delays and make India’s investment system more predictable for global investors.

The last SOP was issued in 2017, which had a 10-week clearance window. The new update reflects the government’s effort to balance faster investment approvals with necessary security and regulatory checks.