The union cabinet has approved an increase in the limit of foreign direct investment (FDI) in the telecom sector from 49 per cent to 74 per cent. Under the new norms, 74 per cent foreign investment can be made directly or indirectly in an operating company or through a holding company. The remaining 26 per cent will be owned by resident Indians or an Indian company. Any foreign stake will be counted as part of the 74 per cent cap. Foreign stakes in state-run banks have been excluded from the 74 per cent limit. However, foreign shareholdings in private sector banks, such as ICICI Banking Corporation, IDBI Bank and HDFC Bank, would be considered as foreign equity.
