Govt Unveils Fast-Track FDI Approval Route for Solar, Battery and Wind Component Manufacturing

The Government of India has introduced a new Standard Operating Procedure (SOP) for processing Foreign Direct Investment (FDI) proposals, establishing a faster approval mechanism for investments in several renewable energy, battery storage and advanced manufacturing sectors.

Issued by the Department for Promotion of Industry and Internal Trade (DPIIT), the SOP lays out revised procedures for FDI approvals, enhanced disclosure requirements and sector-specific timelines, with a major focus on investments linked to countries sharing land borders with India.

Under the revised framework, eligible investments from neighbouring countries in specified sectors can receive government decisions within 60 days, provided the foreign investor holds up to 49 percent ownership and majority ownership and control remain with resident Indian citizens or Indian-controlled entities.

The fast-track sectors listed under Schedule II of the SOP include multiple renewable energy and clean-tech manufacturing segments. These include polysilicon manufacturing, ingot and wafer production, advanced chemistry cell (ACC) battery components, battery energy storage systems (BESS), rare earth processing and permanent magnets used in wind turbine generators.

The policy also covers a broad range of battery supply-chain components including cathode active materials (CAM), anode active materials (AAM), electrolytes, separator films, battery-grade copper foil, battery-grade aluminium foil, conductive additives, binder materials, and components for sodium-ion and zinc-based batteries.

In the power and grid infrastructure segment, the government has included manufacturing of transformer insulation materials, pressboards, castings and forgings for thermal, hydro and nuclear power plants, alloy steel seamless pipes for boilers, and 800 kV and 400 kV RIP bushings.

The SOP further identifies electronic capital goods and component manufacturing as priority sectors. These include printed circuit boards (PCBs), power modules, sensor modules, display modules, camera modules, Li-ion batteries and cells, chargers, cables, wearable electronics, hearables and electromechanical components such as connectors, antennas, speakers and microphones.

The document also introduces stricter compliance and disclosure requirements for FDI proposals. Applicants will now be required to provide detailed beneficial ownership disclosures, upstream shareholding structures, control rights, board appointment rights, voting arrangements and information related to significant beneficial owners (SBOs).

For investments involving entities or individuals from countries sharing land borders with India, the SOP mandates disclosure of all upstream shareholders, investment managers, general partners, investment committee members and key managerial personnel connected to such jurisdictions.

Security clearance from the Ministry of Home Affairs (MHA) will continue to be mandatory for sectors including defence, telecom, broadcasting, civil aviation, private security agencies, space and mining of titanium-bearing minerals and ores. Applications covered under Press Note 2 of 2026 will also require security review.

The SOP formalises a completely paperless FDI approval process through the Foreign Investment Facilitation (FIF)/National Single Window System (NSWS) portal. It also prescribes a standard cumulative timeline of 12 weeks for most FDI approvals, excluding time taken by applicants to respond to queries or furnish additional documents.

Under the new process, DPIIT will circulate applications to the concerned administrative ministry, the Reserve Bank of India (RBI), Ministry of External Affairs (MEA) and other regulators for comments through the online portal itself.

The government said the revised framework is intended to simplify and expedite disposal of FDI proposals while strengthening scrutiny mechanisms for sensitive investments and strategically important sectors.