Centre weighs 200% increase in foreign investment approval threshold

The government is considering raising the threshold for foreign direct investment (FDI) proposals requiring approval from the Cabinet Committee on Economic Affairs (CCEA) to Rs 15,000 crore from the current Rs 5,000 crore, in a move aimed at further improving India's investment climate, according to sources cited by news agency PTI.The proposal is currently at the discussion stage and is part of a broader review of FDI rules as the government seeks to attract larger overseas investments and simplify the approval process.Under the existing FDI policy, proposals involving total foreign equity inflows of more than Rs 5,000 crore are placed before the CCEA for consideration.Proposals below that threshold are decided by the respective line ministries.The Rs 5,000-crore threshold has remained unchanged since November 2015.CCEA limit under review amid larger investmentsAccording to sources, the government is considering the higher threshold in view of prevailing economic conditions, inflation and the growing scale of investments over the years.The move is also aimed at supporting the government's ease-of-doing-business objective by allowing line ministries to handle a larger number of FDI proposals without referring them to the CCEA.A committee of secretaries had earlier suggested raising the threshold for FDI proposals that require consideration by the CCEA, the sources said.The CCEA is a high-level Cabinet panel headed by Prime Minister Narendra Modi. Its members include key ministers such as the home minister and finance minister.Government also looks to ease downstream investment rulesSeparately, the government is considering changes to rules governing downstream or indirect foreign investment in Indian companies to facilitate overseas capital inflows and job creation.Under the proposal, an Indian company receiving indirect foreign investment may not need to seek fresh government approval if the domestic company higher up in the ownership chain has already obtained the required approval.At present, prior government approval is required for downstream or indirect foreign investment in two broad situations — investments in sectors where FDI is under the government approval route, and investments involving entities from countries that share a land border with India.The proposed changes could reduce the need for repeated approvals in cases where the relevant investment has already been cleared at an earlier stage of the ownership structure.FDI inflows cross $1.16 trillion since 2000The government has taken several measures in recent years to attract foreign capital and liberalise FDI rules.According to figures cited by PTI, cumulative FDI inflows into India crossed $1.16 trillion between April 2000 and March 2026.The leading sources of FDI include Mauritius, Singapore, the US, the Netherlands, Japan, the UK and the UAE, along with other major investor countries.The proposed changes to the CCEA threshold and downstream investment rules are part of the government's broader effort to facilitate investment while retaining government scrutiny in sensitive sectors and investments covered by the approval route.Get the latest Business News and Live updates. Download the TOI app.