FDI IN PROPRIETORY FIRMS - FIPB DECISIONS DELAYED

The Reserve Bank of India (RBI) stands regarding investment by NRIs and PIOs in partnership firms is holding up clearance of applications for fresh investments by the Foreign Investment Promotion Board (FIPB). The central bank has been asked to furnish its “reasoned comments” to enable the Government to take a stand on such proposals. While the regulations issued by the RBI itself under Foreign Exchange Management Act (FEMA) provide for the approval to such investments, the latter
has not cleared applications required to be made under these regulations. Consequently, the FIPB has been unable to clear these proposals.