100 pc FDI in telecom approved

In a major reforms push, the government today allowed 100 per cent foreign direct investment in the telecom sector, meeting a key demand of the fund-starved industry.
"Basic and Cellular Services (fix phone and mobile services), existing has been 74 per cent and up to 49 per cent automatic route and 74 per cent though FIPB route. Now there is raising of cap from 74 to 100 per cent in basic and cellular services. Up to 49 per cent remains under automatic route and 49-100 per cent through FIPB route," Commerce and Industry Minister Anand Sharma said here.
A presentation was made by Department of Industrial Policy and Promotion (DIPP) following consultations with the key ministries or the nodal ministries involved, he said.

Earlier, FDI limit in the sector was 74 per cent where 49 per cent was done through automatic route and rest required nod from Foreign Investment Promotion Board.
The idea behind the decision to increase FDI limit in telecom sector is to help the industry get fresh funds to lower financial burden.
The moves also brings relief for foreign partners in telecom companies as they can have complete ownership of the business.

"Foreign investors will no longer need to partner with Indian investors in order to comply with regulatory requirements," PwC India's for Executive Director - Tax and Regulatory Services, Goldie Dhama said.

Telecom major Reliance Communications said: "100 per cent FDI in telecom will enhance value for all stakeholders."
A spokesperson of Russian conglomerate Sistema controlled SSTL's said, "Sistema Shyam TeleServices welcomes 100 per cent FDI in telecom. The much needed policy decision is a very positive development for the entire industry."
Sistema holds 56.68 per cent stake in SSTL, Russian government 17.14 and around 24 per cent equity is owned by its Indian partner Shyam Teleservices.