In further liberalising the foreign investment regime, the government Monday said foreign investors eligible through the automatic approval route should seek prior approval only in case of specific reasons.
"The investors are hereby advised to access the automatic route where the policy so permits. Whenever prior approval is sought for activities or royalty payments eligible for automatic route, the investors would need to indicate the specific reason for seeking it," an official statement said.
This means if a company wants to invest in a sector covered under the automatic route, it need not take the prior approval of the government. It will need to apply for the government's permission only if it is for a specific purpose.
The statement said foreign direct investment up to 100 per cent is permitted under the automatic route in most sectors or activities. It is also allowed for foreign technology collaboration where the payments are within five per cent for domestic sales and eight per cent for exports.
The government added only cases not covered under the automatic route needed government approval through FIPB or Project Approval Board for FDI or foreign technology collaboration.
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