India issues fast-track SOP for FDI approvals in energy manufacturing
The Department for Promotion of Industry and Internal Trade (DPIIT) has introduced a new Standard Operating Procedure (SOP) to accelerate approvals for Foreign Direct Investment (FDI) proposals requiring government clearance, with several energy manufacturing segments included under a fast-track framework.
The SOP establishes a paperless and time-bound approval system through the Foreign Investment Facilitation (FIF) and National Single Window System (NSWS) portal. Physical submission of documents has been discontinued. Under the revised mechanism, proposals are expected to be decided within 12 weeks, excluding the time taken by applicants to respond to queries.
DPIIT will route proposals to the concerned Administrative Ministry within two days of receipt. The SOP also states that any rejection of a proposal or imposition of additional conditions will require DPIIT approval.
The government has notified 40 activities across six sectors under Schedule II of the SOP for expedited clearances. In the energy value chain, the framework covers manufacturing of capital goods for power generation, advanced battery components, Battery Energy Storage Systems (BESS), and rare earth magnets used in wind turbine generators.
Eligible activities under power generation equipment include manufacturing insulation items, castings and forgings for thermal, hydro and nuclear power plants, along with Alloy Steel Seamless Pipes and Tubes for boilers, RIP bushings, and transformer insulation materials.
The advanced battery category includes Cathode Active Materials (CAM), Anode Active Materials (AAM), electrolytes, separators, and battery-grade copper and aluminium foil. The energy storage segment covers BESS, containerised BESS, battery packs, and components linked to sodium-ion and zinc-based battery technologies.
The SOP also outlines provisions for investments originating from land-bordering countries (LBCs), including China, Pakistan, Bangladesh, Nepal, Bhutan, Myanmar and Afghanistan. Under the framework, FDI proposals from LBC investors holding up to 49% equity in notified energy-sector activities will be processed within 60 days, provided majority ownership and control remain with resident Indian citizens or Indian-controlled entities.
The government has also indicated openness to Chinese investment in solar wafer manufacturing, lithium-ion batteries and related clean energy manufacturing activities within these conditions.
The SOP further requires consultations with the Reserve Bank of India (RBI), Ministry of Home Affairs (MHA), and Ministry of External Affairs (MEA), depending on the nature of the proposal. Investors linked to LBC entities will also need to disclose ownership structures, board composition, and citizenship details of key personnel.
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