Govt notifies FDI norms in telecom
The revised guidelines allow telecom companies to appoint foreign CEOs with Home Ministry clearance.
By PTI |
NEW DELHI: Eighteen months after announcing it, the government today notified the revised foreign direct investment guidelines in the Indian telecom sector, where FDI cap has been raised to 74 per cent from 49 per cent.
The revised guidelines allow telecom companies to appoint foreign CEOs with Home Ministry clearance and have network access from remote areas -- two key features which the original guidelines did not permit.
"Both direct and indirect foreign investment in the licensee company shall be counted for the purpose of FDI ceiling. Foreign Investment shall include investment by Foreign Institutional Investors, Non-resident Indians, Foreign Currency Convertible Bonds, American Depository Receipts, Global Depository Receipts and convertible preference shares held by foreign entity."
Indirect foreign investment shall mean foreign investment in the company/companies holding shares of the licensee company and their holding company/companies or legal entity (such as mutual funds, trusts) on proportionate basis. Shares of the licensee company held by Indian public sector banks and Indian public sector financial institutions will be treated as "Indian holding", the guidelines said.
"The Indian shareholding will not be less than 26 per cent," said the norms announced by Department of Industrial Policy and Promotion.
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 investment ceiling.
The revised guidelines allow telecom companies to appoint foreign CEOs with Home Ministry clearance and have network access from remote areas -- two key features which the original guidelines did not permit.
"Both direct and indirect foreign investment in the licensee company shall be counted for the purpose of FDI ceiling. Foreign Investment shall include investment by Foreign Institutional Investors, Non-resident Indians, Foreign Currency Convertible Bonds, American Depository Receipts, Global Depository Receipts and convertible preference shares held by foreign entity."
Indirect foreign investment shall mean foreign investment in the company/companies holding shares of the licensee company and their holding company/companies or legal entity (such as mutual funds, trusts) on proportionate basis. Shares of the licensee company held by Indian public sector banks and Indian public sector financial institutions will be treated as "Indian holding", the guidelines said.
"The Indian shareholding will not be less than 26 per cent," said the norms announced by Department of Industrial Policy and Promotion.
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 investment ceiling.
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