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News >> Technology >>
Govt hike FDI ceiling in telecom to 74%
By agencies
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Tuesday, 08 November 2005, 20:30 IST
NEW DELHI: The Government of India increased the level of foreign direct investment cap in telecom services to 74 percent from 49 percent, and said that FDI up to 49 percent would continue to be on automatic route.
The notification issued by the Government stated, the total FDI, including investments by foreign institutional investors (FIIs), non-resident Indians, foreign currency convertible bonds, American Depository Receipts, Global Depository Receipts, convertible preference shares and proportionate foreign investment in Indian promoters/investment companies including their holding companies, will not exceed 74 percent.
It said, Seventy four percent foreign investment can be made directly or indirectly in the operating company or through a holding company. Whereas, the remaining 26 percent would be remained with Indian citizens or an Indian company.
However, foreign component in the total holding of Indian public sector banks and public sector financial institutions would be treated as Indian holding.
"The licensee will be required to disclose the status of such foreign holding and certify that the foreign investment is within the ceiling of 74 percent on a half-yearly basis," it said.
Earlier the Government had announced the decision to hike FDI cap during earlier this year but it was delayed due to Left parties opposition.
The Government said the majority of directors on board including Chairman, Managing Director and CEO would be resident Indian citizens. The positions will be fixed after doing consultation with serious Indian investors, who will hold at least 10 percent equity in the licensee company.
The notification also restricts transferring any accounting information related to subscribers (except roaming or billing information) outside India. Besides, details of infrastructure and network diagrams (except to telecom equipment suppliers and manufacturers) are also barred from being transferred outside India, according to the issued statement.