What is Department of Industrial Policy and Promotion (DIPP)? What is its role in FDI Policy?

The DIPP was established in 1995 under the Ministry of Commerce and Industry as a nodal agency for design and facilitation of industrial, trade and commerce policies.

It was reconstituted in 2000 with the merger of the Department of Industrial Development.

The Department is performing vital functions related to policy design in several fields including industrial policy, intellectual property, FDI policy etc.

A major functional relevance of the Department is that it has acted as a think tank in formulating industrial and trade policies, facilitating trade and investment flows, and monitoring industrial development in the post liberalization phase.

Following are the core areas of DIPP:

  • Formulation and Implementation of India’s Industrial Policy
  • Formulation and Amendment of the FDI policy
  • Industrial Promotion
  • Formulation and Implementation of Intellectual property Rights Policy

FDI policy formulation and execution is one of the main functions of the DIPP. Following are the main functions of the DIPP:

  • Formulation and implementation of industrial policy and strategies for industrial development in conformity with the development needs and national objectives;
  • Monitoring the industrial growth, in general, and performance of industries specifically assigned to it, in particular, including advice on all industrial and technical matters;
  • Formulation of Foreign Direct Investment (FDI) Policy and promotion, approval and facilitation of FDI;
  • Encouragement to foreign technology collaborations at enterprise level and formulating policy parameters for the same;
  • Formulation of policies relating to Intellectual Property Rights in the fields of Patents, Trademarks, Industrial Designs and Geographical Indications of Goods and administration of regulations, rules made there under ;
  • Administration of Industries (Development & Regulation) Act, 1951
  • Promoting industrial development of industrially backward areas and the North Eastern Region including International Co-operation for industrial partnerships and
  • Promotion of productivity, quality and technical cooperation.

Role of DIPP in FDI Policy formulation

The DIPP is responsible for formulation of the FDI policy and facilitation of FDI inflows into the country. In May 2015, the Department has brought out a Consolidated FDI Policy, elaborating the various aspects. FDI policy changes are designed at the auspices of the DIPP.

The Department also plays a pro-active role in solving the problems faced by foreign investors in implementation of their projects through Foreign Investment Implementation Authority (FIIA), which interacts directly with the Ministry/State Government concerned.

It also disseminates information about the positive investment climate that exists in the Indian economy to promote investments. The Department also encourages and facilitates foreign technology collaborations among Indian companies and bilateral Economic cooperation agreements in the region.

The Department is responsible for encouraging acquisition of technological capability in various sectors of the industry through liberal foreign technology collaboration regime. Foreign technology induction is facilitated both through FDI and through Foreign Technology Collaboration (FTC) agreement. FTC agreements are approved either through the automatic route under the delegated power exercised by the RBI or by the Government.