Union Cabinet approves abolition of 25-year-old Foreign Investment Promotion Board

The Union Cabinet approved winding up of the 25-year-old Foreign Investment Promotion Board (FIPB), which has been vetting FDI proposals requiring government approval.
Finance Minister Arun Jaitley in his Budget speech on February 1 had announced the scrapping of the inter- ministerial body, which comes under the ministry's Department of Economic Affairs.
The decision to abolish FIPB was taken by the Cabinet, chaired by Prime Minister Narendra Modi.

FIPB will be replaced by a new mechanism under which the proposals will be approved by the ministries concerned as per the standard operating procedure approved by the Cabinet.

Proposals in sensitive sectors will require the home ministry's approval.
Current proposals pending with FIPB, will go back to the ministries concerned.
FIPB was constituted under the Prime Minister's Office following economic liberalisation in the early 1990s.
Currently, only 11 sectors, including defence and retail trading, require government approval for foreign direct investment (FDI).