Government mulls simplifying application process under Press Note 2 to ease FDI flow from border nations

It is planning to remove procedural hurdles which can be approved without government permission," a source said.In March, the government eased FDI norms for China and other countries sharing land borders with India by allowing overseas firms from these nations with up to a 10 per cent shareholding to invest in the country without prior government approval.Earlier, overseas firms with shareholders from these nations owning even a single share had to seek government approval to invest in India in any sector.Live EventsHowever, all other conditions of the FDI policy, including sectoral caps and entry routes, remain applicable to these investments.Also, these investments will be subject to prior reporting of details to the Department for Promotion of Industry and Internal Trade (DPIIT).The government amended Press Note 3 of 2020 to bring these changes into effect.Highlighting the indigenisation push, a senior government official said that DPIIT has firmed up a list of 100 products whose production will be completely localised."Inter-ministerial consultation has already taken place on the matter.

Now, discussions are on with respective departments to decide on an action plan," the source said.Another source said that the government is expediting the implementation of the Rs 10,000-crore Startup Fund of Funds 2.0.Through this fund, the government will support SEBI-registered Alternative Investment Funds (AIFs), which will in turn invest in startups."We have approved Rs 270 crore for AIFs. SIDBI has already funded 15 AIFs from that corpus," the source said.The government has authorised the Small Industries Development Bank of India (SIDBI) to implement the Startup India Fund of Funds 2.0.The Startup India Fund of Funds 2.0 does not invest directly in startups; instead, it contributes to the capital of SEBI-registered Category I and Category II AIFs, which then invest in equity or equity-linked instruments of emerging companies. PTI(You can now subscribe to our Economic Times WhatsApp channel)