The FIPB (Foreign Investment Promotion Board) now can give green signal to proposals of foreign equity investments of up to Rs 1200 crores. Home affairs minister P Chidambaram said after a meeting of CCEA, “With this liberalization, approval is expected to save time and efforts for the FIPB and CCEA and also expedite foreign investment inflow.”

Till now proposals of foreign equity investments above Rs 600 crores were presented for the Cabinet Committee of Economic Affairs (CCEA) approval. The decision would bring cheers for the foreign investor’s as the easing of norms government has sent a positive signal to those waiting on the sidelines to invest in one of the most promising emerging market of world.

 “This is aimed at simplifying the process for application and approval of FDI”, said, Anand Sharma, the commerce minister. FDI inflows in the country recorded a 13% increase at $1.542 billion for December 2009 as compared to December 2008. In another decision, no fresh approvals would be required in cases where companies have prior FIPB or CCEA approval for their initial investment or under sectoral caps.

Total project cost will not be considered under the new guidelines, but only equity investments will be considered which means that investments requiring CCEA approval would not go up sharply.