This article focuses on the approval route. It sets out the procedure for handling FDI proposals on the approval route, based on the Standard Operating Procedure (SOP) issued by the Department for Promotion of Industry and Internal Trade (DPIIT) on May 4, 2026.
I. When the approval route applies
Investments in the following cases, among others, generally require government approval:
- sectors such as defence, telecom, civil aviation, satellites, mining, private security, and print media;
- foreign investment from entities or individuals based in countries sharing a land border with India1.
II. The filing procedure (SOP dated May 4, 2026)
| Step | Action |
|---|---|
| Step 1 | Applications are submitted online through the National Single Window System (NSWS), integrated with the Foreign Investment Facilitation Portal (FIFP). |
| Step 2 | All required documents are uploaded digitally. The list is set out in Annexure I to the SOP and includes the shareholding pattern, KYC documents, and investment details. |
| Step 3 | A Security Clearance Form is submitted for sensitive sectors2, or for investors from countries sharing a land border with India. The format is set out in Annexure II to the SOP. |
| Step 4 | DPIIT forwards the application to the relevant administrative ministry or department within two days. |
| Step 5 | The application is also sent to the Reserve Bank of India, the Ministry of External Affairs, and the Ministry of Home Affairs (where security clearance is required) for consultation or information, as applicable. |
| Step 6 | Ministries and departments raise queries or seek additional information or documents through the FIFP. |
| Step 7 | The final decision is taken by the concerned ministry, or escalated to the Cabinet Committee on Economic Affairs (CCEA) for high-value proposals3. |
III. Indicative timeline (Annexure V of the SOP)
| Action point | Time period | Cumulative |
|---|---|---|
| DPIIT forwards the proposal to the relevant ministries | 2 days | — |
| Initial scrutiny and additional document requests | 12 days | 2 weeks |
| Submission of clarification by DPIIT on specific FDI-policy issues | 2 weeks | 4 weeks |
| Submission of comments by the MHA, MEA, RBI, any other consulted ministry or department, regulator, or stakeholder | 6 weeks | 8 weeks |
| Approval of the proposal | 4 weeks | 12 weeks |
An additional two weeks is available to the DPIIT for examining proposals that are to be rejected, or where the Competent Authority intends to impose additional conditions. The stated time limits also do not include the time taken by applicants to address deficiencies or to furnish additional information sought by the Competent Authority.
IV. Post-approval requirements
Where the investment is in an entity that is yet to be incorporated, the applicant must submit the Certificate of Incorporation, along with the charter documents (the Memorandum and Articles of Association) of the investee company, to the Competent Authority within 60 days of receiving the approval letter.
Once the first audit cycle of the newly incorporated investee is complete, the applicant must also submit the audited financial statements to the Competent Authority.
In effect, where the proposal is for an entity yet to be incorporated, incorporation must be completed within 60 days of government approval. Timely incorporation is essential to remain compliant with the post-approval requirements.
Other post-approval compliances are as follows:
| Compliance requirement | Timeline |
|---|---|
| Receipt of funds through an authorised dealer bank | — |
| Share allotment | Within 60 days of receipt of funds |
| Filing of FC-GPR (FIRMS portal) | Within 30 days of share allotment |
| Filing of PAS-3 with the MCA | As required under the Companies Act |
| FLA Return | By 15 July annually |
V. Closure, withdrawal, and amendment
- Proposals may be closed, after due reminders, where they are not properly submitted.
- Applicants may withdraw an application by written request.
- Amendments to approvals do not require a fresh application.
- A corrigendum may be issued for typographical errors.
VI. Final note
The DPIIT SOP is intended to ensure that FDI proposals requiring approval are processed transparently and efficiently, in coordination with sectoral regulators and ministries. A timely response to queries, and adherence to the compliance timelines, are critical to navigating the approval process.