Govt allows 100% FDI in telecom sector (2024)

The government on Wednesday raised foreign direct investment limit in telecom sector through the automatic route to 100% from 49% earlier with riders, in sync with the Cabinet approval last month for a package to salvage the beleaguered telecom sector.

However, the Press Note 4 of 2021 series issued by the Department of Promotion of Industry and Internal Trade (DPIIT) said this will be subject to press note 3 of 2020 series which mandates that all foreign investments from countries with which India shares land border or where the beneficial owner of an investment into India is situated in, can invest only under the government route. Government brought in this regulation last year after clashes with Chinese troops in the Galwan valley killed 20 Indian soldiers.

All telecom services including telecom infrastructure providers such as “Basic, Cellular, United Access Services, Unified license (Access services), Unified License, National/International Long Distance, Commercial V-Sat, Public Mobile Radio Trunked Services (PMRTS), Global Mobile Personal Communications Services (GMPCS), all types of ISP licenses, Voice Mail/Audiotex/UMS, Resale of IPLC, Mobile Number Portability services, Infrastructure Provider Category-I (providing dark fibre, right of way, duct space, tower), Other Service Providers and such other services as may be permitted by the Department of Telecommunications (DoT)" have been allowed 100% FDI through automatic route.

However, the press note clarified that the licensing, security and any other terms and conditions as specified by Department of Telecommunications from time to time, shall be observed by licensee/entities providing services as well as investors.

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