IndiaPost.com - Govt raise FDI ceiling in telecom to 74 pc

NEW DELHI: In a move that could bolster investment in the fast growing telecom sector, the government has decided to raise Foreign Direct Investment up to 74 per cent, up from prevailing ceiling of 49 per cent.

Along with raising the FDI limit, the Union Cabinet also approved revised conditions for such direct investment, Information and Broadcasting Minister P R Dasmunsi told reporters after a meeting of the Cabinet, chaired by Prime Minister Manmohan Singh.

The Cabinet clearance followed after the Department of Telecom and security agencies reached a consensus on allowing remote access with certain safeguards. The changes in Press Note 5 of 2005, which would increase the FDI limit in the sector, were delayed due to stiff opposition from home ministry.

However, following consultations with the industry and persuasion by Communications Minister Dayanidhi Maran, the Cabinet agreed to revise the conditions for enhancement of FDI ceiling, DoT sources said.

Dasmunsi said remote access to networks in India would be allowed only from approved locations and to equipment suppliers, manufacturers and affiliates. It would not be used for monitoring of content and its mirror image information would be made available online to security agencies. A complete audit trail of remote access activities would be maintained for six months.

These changes will help in implementation of FDI policy notified in November 2005, a government statement said. In December last year, the Cabinet had extended the deadline for telecom operators to comply with the norms for an increased foreign direct investment limit of 74 per cent. The current deadline expires on April 2.