The foreign direct investment limit on equity for India’s telecom services sector will remain at 74%, according to the country’s Department of Industrial Policy and Promotion.
Detailed in a recent department policy document, the move to keep the cap in place is effective as of Oct. 1.
The FDI limit of 74% will have an automatic FDI entry route of up to 49% and a government route beyond 49% to 74%, a telecom research unit said.
According to the policy document, the cap is applicable to basic, cellular, Unified Access Services, National/International Long Distance, V-SAT, Public Mobile Radio Trunked Services, Global Mobile Personal Communications Services and other value-added services.
“Both direct and indirect foreign investment in the licensee company shall be counted for the purpose of FDI ceiling,” the policy document said. “In addition to this, FDI in the licensee company/Indian promoters/investment companies including their holding companies shall require approval of the Foreign Investment Promotion Board if it has a bearing on the overall ceiling of 74 percent. While approving the investment proposals, FIPB shall take note that investment is not coming from countries of concern and/or unfriendly entities.”
The policy document also establishes a set of security clauses. All telecom service providers are required to submit a compliance report on the investment criteria twice a year, on Jan. 1 and July 1.
Click here to read/download the FDI policy document
