Meta must follow Indian law, not just global rules: Govt sources after MeitY talks

The Indian government is contemplating increasing the threshold for foreign direct investment (FDI) proposals that require approval from the Cabinet Committee on Economic Affairs (CCEA) from Rs 5,000 crore to Rs 15,000 crore, according to sources. The CCEA, chaired by Prime Minister Narendra Modi, comprises high-ranking Union Cabinet ministers such as the Home Minister and Finance Minister.

Presently, proposals with a total foreign equity inflow exceeding Rs 5,000 crore require CCEA consideration, while those below this threshold are decided by respective line ministries. This threshold has remained unchanged since November 2015.

The government's decision to review the current threshold is driven by prevailing economic conditions, rising inflation, the surge in investment scale over time, and the objective of promoting ease of doing business. Previously, a committee of secretaries proposed an upward revision of the CCEA approval limit for FDI proposals necessitating government approval. This proposal is currently under discussion.

Additionally, the government is contemplating easing FDI norms for downstream investments to foster overseas fund inflows and generate employment opportunities. Under the proposed change, indirect foreign investment in Indian companies would be exempt from obtaining fresh government approval if the upstream domestic firm had already received such approval.

Presently, prior government approval is mandatory for downstream or indirect foreign investment in two scenarios: sectors under the government approval route for FDI and investments from countries sharing a land border with India. Since April 2000, investments have surpassed USD 1.16 trillion, with the top ten investors comprising Mauritius, Singapore, the US, the Netherlands, Japan, the UK, and the UAE.