RBI relaxes overseas norms for telecom firms

The Reserve Bank has liberalised investment norms for Indian telecom companies by allowing them to invest in international submarine cable consortia through automatic route.

"As a measure of further liberalisation, it has now been decided... To allow Indian companies to participate in a consortium with other international operators to construct and maintain submarine cable systems on co-ownership basis under the automatic route," RBI said in a notification yesterday.

"Accordingly, banks may allow remittances by Indian companies for overseas direct investment," the notification added.

It, however, said that the companies should have international long distance (ILD) licence from the Department of Telecom (DoT).

"It is reiterated that the revised form is only a rationalisation of the reporting procedure and there is no change or dilution in the existing eligibility criteria or documentation".

Eventually, these reports will be received on line by Reserve Bank. All such investments would be subject to the reporting requirements as prescribed under Foreign Exchange Management (Transfer or issue of any Foreign Security) Regulations, 2004.

Earlier, RBI had allowed domestic entities to invest in overseas unincorporated entities in the oil sector, up to 400 per cent of the net worth of the Indian company, under the automatic route.