The government on Tuesday notified its decision to permit 100 per cent FDI under automatic route in the telecom services sector.
In a press note, the Department for Promotion of Industry and Internal Trade (DPIIT) said foreign investment in telecom services will be subject to the condition of Press Note 3 of 2020.
Accordingly, cases requiring prior government approval under the provisions of Press Note 3 will continue to be in place.
As per the Press Note 3, an entity of a country, which shares a land border with India or where the beneficial owner of an investment into India is situated in or is a citizen of any such country, can invest only under the government route.
On September 15, while addressing a press briefing, Union telecom minister Ashwini Vaishnaw said, “In the telecom sector, there was a 100 percent FDI but only 49 percent of it was in the automatic route. Today, the cabinet has decided that 100 percent FDI in telecom via the automatic route has been allowed. All safeguards including press note 3 and others will be applicable.”
The 100 percent automatic route, however, will not be applicable to investors from countries such as China and Pakistan. In April 2020, the government had imposed regulations on FDI originating from countries that share a land border with India to thwart any hostile takeover of domestic businesses.
(With PTI inputs)
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