100% FDI permitted by Govt. of India in the Telecom Sector

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New Delhi: The government on Tuesday notified its decision to permit 100 percent foreign direct investment (FDI) under automatic route in the telecom services sector.

In a press note, the Department for Promotion of Industry and Internal Trade (DPI IT) 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.

The DPIIT notifies its decisions through such press notes.

As per the Press Note 3, an entity of a country, which shares a land border with In dia or where the beneficial owner of investment into India is situated in or is a citizen of any such country, can invest only under the government route.

According to the DPIIT’s press note, 100 percent FDI is permitted in areas, including telecom infrastructure providers category-I – basic, cellular, united access services, unified license (access services), unified license, national/ international long-distance, public mobile radio trunked services (PMRTS), and global mobile personal communications services.

Other services include mobile number portability services, infrastructure provider category-I, providing dark fiber, right of way, duct space, and tower.

On September 15, the Cabinet approved a big-bang ‘relief package for the stressed telecom sector that includes a four-year break for companies from paying statutory dues, permission to share scarce airwaves, change in the definition of revenue on which levies are paid, and 100 percent foreign investment through the automatic route.

So far, up to 49 percent was allowed through the automatic route and anything thereafter had to necessarily go through the government route. The latest measures are expected to ease the cash flow issues being faced by some players in the industry.

Telecom industry body Cellular Operators Association of India (COAI) said the FDI approval will help the industry to build a robust telecom sector for new India.