The Indian rupee has been made fully convertible on the current account. As regards Industrial Policy, no licence is required to set up an industry except for 14 industries related to defence and other sensitive areas. As a result of these measures with vast investment opportunities available to Non Resident Indians and foreign companies, the flow of foreign investment has significantly increased. As a part of the economic reforms programme, policy and procedures governing foreign investment and technology transfer have been significantly simplified and streamlined. Today, foreign investment is very welcome in practically all sectors of the economy.
Any proposal involving foreign investment requires approval.
The following routes are available for foreign investors for obtaining such approvals. For proposals relating to technical collaboration agreement, the payment of know-how fees and royalties conform to, the following parameters. The RBI accords automatic approval to such proposals within a period of two weeks. The FIPB normally clears the foreign investment proposals within a period of four to six weeks. The FIPB is especially empowered to engage in purposive negotiation and also consider proposals in totality free from pre-determined parameters or procedures.