PMO proposes sweeping powers to regulate FDI
The PMO plans an umbrella legislation to suspend foreign investment in telecom, airports and IT.
By PTI |
NEW DELHI: The Prime Minister's Office has sought the opinion of various ministries for creating an umbrella legislation that would empower the government to suspend any foreign investment in sensitive sectors such as telecom, airports and IT on national security considerations.
The National Security Council has proposed the 'National Security Exemption Act' to empower the "government to suspend or prohibit any foreign acquisition, merger or takeovers of an Indian company that is considered prejudicial to national interests."
Sources said NSC has suggested security screening of foreign participation in sensitive sectors, sensitive locations and from countries of concern.
Sensitive sectors were identified as seaports, airports, telecom, Internet service providers, international long distance telecom services, oil refining, gas pipelines, oil and gas exploration, shipping, metallurgy, defence, data processing and pharmaceuticals.
Jammu and Kashmir, Chhattisgarh and North Eastern states and areas in proximity to vital nuclear, space and defence installations and border areas were classified as sensitive locations.
The National Security Council has proposed the 'National Security Exemption Act' to empower the "government to suspend or prohibit any foreign acquisition, merger or takeovers of an Indian company that is considered prejudicial to national interests."
Sources said NSC has suggested security screening of foreign participation in sensitive sectors, sensitive locations and from countries of concern.
Sensitive sectors were identified as seaports, airports, telecom, Internet service providers, international long distance telecom services, oil refining, gas pipelines, oil and gas exploration, shipping, metallurgy, defence, data processing and pharmaceuticals.
Jammu and Kashmir, Chhattisgarh and North Eastern states and areas in proximity to vital nuclear, space and defence installations and border areas were classified as sensitive locations.
Foreign investment, according to NSC, from countries such as China, Hong Kong, Macau, Taiwan, Pakistan, Bangladesh, Afghanistan and North Korea could threaten security interets as the entities from these countries could be manipulated.
Sources said NSC was of the opinion that flow of unverifiable investments both from tax havens like Mauritius, Cyprus and Cayman Islands and from criminal groups operating from other countries posed a security threat as the source of money could be illegal and it could be used to create economic crisis through sudden withdrawal or pumping in.
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