GoM for hike in foreign investment cap in telecom to 74%
New Delhi: The group of ministers (GoM) on telecom has suggested a hike in the foreign investment limit in Indian telecom companies to 74 per cent from the present overall cap of 49 per cent. Foreign direct investment (FDI) by foreign telecom companies will still remain capped at 49 per cent, though an additional 25-per cent investment by foreign institutional investors (FIIs) will be permitted in the joint venture entity. Till now, the 49-per cent foreign investment cap on telecom companies included both FDI as well as FII investment.

The GoM recommendation, which will go to the Union Cabinet for approval, may attract more investments in the fast-growing telecommunications sector. The panel has also recommended that management control of telecom companies should remain with Indians, regardless of the foreign investment in a company, Union Telecommunications and Disinvestment Minister Arun Shourie said. The GoM, consisting of six ministers and chaired by Finance Minister Jaswant Singh, has also recommended that telecom companies operating within a circle be allowed to merge as long as the number of operators in that circle does not fall below three.
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