Sources said that the decision may have been taken in order to hasten the process of clearances. The FIPB feels that at times it is flooded by proposals which include certain amendments to the original application, which may be discussed and thereafter dealt by the SIA.

Sources said that the FIPB took the decision in the wake of an application filed by Klinken Berg India Ltd which had sought certain relaxations. The company had submitted a proposal under which it would be sourcing cashew kernels, spices, tea, coffee, coconut and groundnut kernels from India and selling it in the overseas markets. The foreign equity in the company is tothe extent of 33.4 per cent. The company cannot import and sell in India and cannot indulge in domestictrading.

It had sought two relaxations from the government, the company be allowed to import since they were intermediates between the buyers and sellers. It also requested the ministry to remove the export obligation clause.

The FIPB rejected the company's proposal on the recommendation of the ministry of agriculture and ministry of commerce. It has directed the company to approach the SIA in case it wants to alter its proposal and discuss it with them. Only when it has been discussed at that level and cleared by them would the FIPB take it up.

The government's decision may be in line with FIPB's efforts to streamline its working. The move has also been taken with a view to bring in a greater level of efficiency to accord approval within 90 days as announced recently by the prime minister.

The ministry is also preparing a blueprint to open up more areas as well as to increase the automatic approval list by moving certain proposals in the coal sector, non-conventional energy sector and food and civilsupplies sector. This measure would also mean, in effect, less involvement of administrative ministries where FDI application often get stuck.

Under the exercise, 20 sectors have been studies by the administrative ministries and the industry ministry, and of these certain sectors have already started the process of further liberalisation.