Free Press Journal

Foreign firms not to be shunned for security risk

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Blaming the home ministry for hampering the “ease of doing business” by scuttling inflow of foreign investments, the Cabinet Secretariat has quietly put into operation a new mechanism.

New Delhi : The Home Ministry and the intelligence agencies have been routinely shooting down thousands of foreign companies wanting to set up industries and projects in India on the ground of the security risks, but it would not be so any more under the Modi government’s decision to set up an inter-ministerial panel to veto such security concerns.

Blaming the home ministry for hampering the “ease of doing business” by scuttling inflow of the foreign investments, particularly from the neighbouring China, the Cabinet Secretariat has quietly put into operation a new mechanism of the panel comprising officials of finance, corporate and commerce ministries and NITI Aayog to give a second look to objections on the security grounds.


The unpublicised order issued on December 7 envisages the panel to review the remarks of the Home Ministry and the intelligence agencies and if it finds that the persons or companies wanting to invest in India are no threat to the national security, the projects will be given clearance. It is a mechanism to take a holistic view of the objections on the economic, corporate or criminal proceedings involving the proponent companies and its directors, the order said.

“Once this committee has seen the observations of home ministry or intelligence/security agencies indicating that the investment/projects, its activities and or its directors are not a threat to national security, it will proceed to look into other observations.

“If other remarks or observations of the MHA or intelligence/security agencies have been found to be inconsequential or irrelevant with regard to any other national or public interest, the committee would record the same and recommend the investment/project,” says the 2-page order. The home ministry tried to stop such a scrutiny for two years. Its officials insist that the order would rather provide an escape route to those persons or companies facing cases of economic offences or who are under the Prevention of Corruption Act.

“Though many of the issues highlighted by the MHA/security agencies may not be important, they may not be so vital as to necessitate stoppage of the said investment or project,” the order said.

“Result is that many sizeable investments and projects having huge potential for creation of employment and rejuvenation of the economy are getting held up, going against the spirit for the ”ease of doing business” on which the government has been working seriously for the last two years,” the order underlined.