FDI in Sensitive Sectors to be Scrutinized

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Mar. 16 – India is considering draft rules that will allow authorities to implement extra scrutiny on foreign direct investment projects approved on the automatic route and included in the list of sensitive sectors.

The Ministry of Home Affairs has been tasked to compile a list of sensitive sectors where FDI will be subject to extra surveillance. The Committee of Secretaries  may restrict disclosure norms for all FDI proposals going through the automatic route or the Foreign Investment Promotion Board (FIPB) route.

The committee also discussed that proposals given FIPB approval but included in the sensitive sector list will get security clearance from India’s home ministry. Under the automatic approval for FDI, drugs and pharmaceuticals, greenfield airport, chemicals and industrial explosives, gas pipelines, ports and private sector refining are considered sensitive sectors.