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India gave South Korean steel giant Posco's planned £8 billion steel plant environmental approval despite serious public concerns.
But the Environment Ministry did ask the company to spend more on social welfare.
Posco spokesman Jeong Yong Min said that the Indian government has asked the company to spend 5 per cent of its £7.6bn investment in eastern state Odisha on social commitments.
But Mr Jeong said that no agreement has been reached on how much the company would spend on social projects.
The plant is expected to produce 13.2 million tons of steel a year.
It is set to be the largest-ever foreign investment in India but has been delayed for years following protests about environmental damage and land procurement.
The Odisha mill scheme has been stalled since 2005 because the local population refused to vacate government-owned land they had occupied for generations.
The project requires about 4,000 acres of land for the steel mill as well as an affiliated power plant, railway line, road, water supply infrastructure and port.
An Indian environmental panel suspended clearances for the plant in 2012, saying that permissions granted earlier were based only on environmental information about the first phase and not the entire project.
And in October, a UN panel of experts urged Posco to suspend its plans over concerns that it threatened the rights and livelihoods of tens of thousands of people.
A New York-based rights group had said that land seizures threatened to displace 22,000 people and deprive thousands more of their means of existence in Odisha.
Posco denied that anyone had been forcibly evicted from private land.
The company said the government was clearing only encroached land and giving due compensation for removing crops and aquaculture ponds.
Last year, Posco pulled out of a proposed £3.2bn steel plant in the south Indian state of Karnataka, dealing a blow to government efforts to attract foreign investment.
The company said it scrapped the project because of delays stemming from local opposition to land grabs.
