FDI over 74 pc in telecom may harm nation: MP

NEW DELHI: Member of Parliament Ajay Chakraborty has said allowing more than 74 per cent foreign direct investment in the telecom sector would be against the security of the nation.

In a letter to Prime Minister Manmohan Singh, the MP said quoting media reports that the Ministry of Commerce has floated a proposal for consideration by a Group of Ministers (GoM) for calculating direct and indirect affect of foreign equity in sectors attracting cap on FDIs.

"If the GoM accepts the proposal floated by the Ministry of Commerce, the 26 per cent Indian equity in telecom firms could be further diluted and foreign equity can easily go above 98 per cent, which would be against the security and sovereignty of India," he said.

He further argued that in the past many companies managed to increase their FDI over 49 per cent in the company by exploiting the loophole in the system and the government was compelled to increase the FDI ceiling in telecom from 49 per cent to 74 per cent.

However, it was made clear that the 74 per cent ceiling will include both the direct and indirect foreign component in the company.