Govt notifies raise of FDI cap in telecom to 74 pc

New Delhi, Apr 19 (UNI) The Government today notified the enhancement the raise in Foreign Direct Investment (FDI) limits from 49 per cent to 74 per cent in certain telecom services.

The enhancement of the FDI ceiling will over Basic, Cellular, Unified Access Services, National/International Long Distance, V-Sat, Public Mobile Radio Trunked Services (PMRTS), Global Mobile Personal Communications Services (GMPCS) and other value added services, an official statement said.

''Both direct and indirect foreign investment in the licensee company shall be counted for the purpose of the FDI ceiling. Foreign investment shall include investment by Foreign Institutional Investors (FIIs), Non-resident Indians (NRIs), Foreign Currency Convertible Bonds (FCCBs), American Depository Receipts (ADRs), Global Depository Receipts (GDRs) and convertible preference shares held by foreign entity.'' Shares of the licensee company held by Indian public sector banks and financial institutions will be treated as 'Indian holding'. In any case, the 'Indian' shareholding will not be less than 26 per cent, the statement said.

FDI up to 49 per cent will continue to be on the automatic route.

FDI in the licensee company/Indian promoters/investment companies including their holding companies, shall require approval of the Foreign Investment Promotion Board (FIPB) if it has a bearing on the overall ceiling of 74 per cent, the statement added.

While approving the investment proposals, the FIPB will take note that investment is not coming from countries of concern and unfriendly entities.

The investment approval by the FIPB shall envisage the conditionality that company would adhere to licence agreement.

''FDI shall be subject to laws of India and not the laws of the foreign countries.'' For security reasons, the details of infrastructure/network diagram (technical details of the network) could be provided on a need basis only to telecom equipment suppliers/manufacturers and the affiliate/parents of the licensee company.

Clearance from the licensor (Department of Telecommunications) would be required if such information is to be provided to anybody else, the statement added.

UNI