In some industries, Foreign Direct Investment (FDI) is not allowed in the automatic approval route in India. And In some industries, it is allowed in an automatic route to some extent and then government approval is required for the FDI.
Here is how the process of Govt approval takes place
1. Filing of Application
Proposal for foreign investment, along with supporting documents to be filed online, on the Foreign Investment Facilitation Portal, at the URL www.fifp.gov.in
2. Internal procedure for approval
• DPIIT will identify the concerned Ministry/ Department and thereafter, circulate the proposal within 2 days. In addition, once the proposal is received, the same would also be circulated online to the RBI within 2 days for comments from the FEMA perspective.
• Proposed investments from Pakistan and Bangladesh would also require clearance from the Ministry of Home Affairs.
• DPIIT would be required to provide its comments within 4 weeks from receipt of an online application, & the Ministry of Home Affairs (if applicable) to provide comments within 6 weeks.
• Pursuant to the above, additional information/ clarifications may be asked from the applicant which is to be provided within 1 week.
• Proposals involving FDI exceeding INR 50bn (approx. $ 775 mn) shall be placed before the Cabinet Committee of Economic Affairs.
3. Final Approval
Once the proposal is complete in all respects, the same gets approved within 8-10 weeks.