Telecom Commission approves 100% FDI in telecom sector

Government of India is carrying out a massive drive to allow as much FDI as possible to get over the economic crisis caused by increasing Current Account Deficit. Consequently there is a talk of increasing the FDI caps in some industries.The Telecom Commission , the highest decision making body of Department of Telecom(DoT), on 02 July approved 100% foreign  direct investment in the telecom sector. Once ratified, the new policy will allow foreign telecom operators to buy out existing Indian partners, as they will no longer need to have a minority shareholder in the country.

This was one of the recommendations of a high-powered committee chaired by Arvind Mayaram, secretary in the department of economic affairs in the ministry of finance, which suggested more liberal FDI norms for various sectors, including aviation and telecommunications. The decision comes even as the home ministry warned against removing any restrictions on FDI in certain critical sectors, citing security concerns. 

The Telecom Commission has allowed up to 49% FDI through the automatic route, with further investments subject to approval by the Foreign Investment Promotion Board. The decision will come into force once the Cabinet approves it. At present, FDI in the sector is permissible only up to 74%, of which 49% is under automatic route while the remaining is subject to an approval from the FIPB. While doing away with FDI curbs will help all telcos in raising money, the news will bring cheer especially to foreign operators, who have minority partners in India. 

There is also a talk of increasing the FDI cap in DTH , MSOs and News Channels. However, it is learnt that Ministry of Home Affairs has raised some security issues in hiking the FDI Cap in certain sectors.

Source: http://cablequest.org/news/national-news/item/2714-telecom-commission-approves-100-fdi-in-telecom-sector.html
Source: http://cablequest.org/news/national-news/item/2714-telecom-commission-approves-100-fdi-in-telecom-sector.html