Review Of Curbs On Foreign Stake In Telecom Units Sought

The Associated Chambers of Commerce & Industry has suggested an immediate review of Indias decision to restrict any foreign stake in telecom ventures to 25 per cent.

The decision to limit foreign equity was announced by the government while signing the telecom pact along with 87 other countries at the World Trade Organisation meeting at Geneva last week. The chamber said a review is necessary as the governments stand does not conform to the existing telecom policy.

Assocham said offering only 25 per cent equity to foreign telecom companies while allowing up to a 49 per cent stake in tender guidelines and 74 per cent through the holding company route would send wrong signals to foreign firm. It would also create doubts about Indias willingness to open up the sector, it added.

The world telecom pact, accounting for over 90 per cent of the global telecom business, will give India access to markets of all the participating countries.

According to the pact, the signatory nations will open up national monopolies to foreign and domestic competition.