The Department for Promotion of Industry and Internal Trade (DPIIT) has notified allowing 100 per cent foreign direct investment (FDI) in the telecom sector under the automatic route. The move comes after the government had announced raising the FDI limit in the telecom sector from 49 per cent to 100 per cent under the automatic route as part of the telecom reforms launched in September 2021.
However, the note issued by the DPIIT added that foreign investment in telecom services will be subject to Paragraph 3.1.1 of the FDI Policy which mandates that all foreign investments from countries with which India shares the land border or where the beneficial owner of investment into India is situated in, can invest only under the Government route
Commenting on the development, Lt. Gen. Dr S.P. Kochhar, Director General, COAI, said “We appreciate and welcome the steps taken by the government to allow 100 per cent FDI under the automatic route in the telecom sector, the simplification of SACFA clearance process for installing towers and amendment in the UAS licence agreement and unified licence agreement for rationalising bank guarantees. The FDI approval will help the industry to build a robust telecom sector for new India. Through the amendment in licence agreements, telecom service providers will be eased off the huge burdens of bank guarantees and will enable the availability of more funding for the expansion of the telecom network and build a digitally connected India. Further, SACFA clearance based self-declaration will facilitate ease of doing business and will help in the faster rollout of services to the citizens. Hence, these steps will enable the fulfilment of Digital India’s vision of the Honourable PM of India.”