Friday, August 02, 2013: On Thurday, the government approved 100 per cent Foreign Direct Investment (FDI) in the telecom sector. It is seen as a key demand of the fund-starved industry. The decision to increase FDI cap in the telecom sector from 74 per cent to 100 per cent was taken at a meeting of the Cabinet Committee on Economic Affairs.
Out of the 74 per cent limit, upto 49 per cent was done by automatic route and rest through the Foreign Investment Promotion Board’s (FIPB) approval. From now onwards, out of 100 per cent FDI, 49 per cent will be done through automatic route and beyond that through FIPB route, said Anand Sharma, the Minister for Commerce and Industry after a meeting of the Union Cabinet.
On July 16, the decision was made in this regard after Prime Minister Manmohan Singh held an inter-ministerial meeting with the senior cabinet ministers, including Finance Minister P. Chidambaram, Defence Minister A.K. Antony, Commerce and Industry Minister Anand Sharma and Telecom Minister Kapil Sibal at his official residence.
According to Anand Sharma, a presentation was made by the Department of Industrial Policy and Promotion (DIPP) following the inter-ministerial meeting.
Increasing FDI limit to 100 per cent in the telecom sector will facilitate the industry in receiving fresh funds in order to lower the financial burden.