The Ministry to Home Affairs has asked the Department of Industrial Policy & Promotion to review the existing foreign direct investment (FDI) limit in the telecom sector. The ministry has asked for a review on grounds of security issues following the revelations of foreign surveillance programmes such as Prism of the US and Tempora of the UK.
The ministry is of the view that the higher foreign ownership in telecom companies would increase the security issues related to remote access and encryption. Therefore, it has sought re-imposition of a cap of 74 per cent on FDI in telecom service providers.
In early 2014, Vodafone took full control of its Indian subsidiary after the limit on FDI was increased to 100 per cent. The Norway-based Telenor group has also sought the permission from the Foreign Investment Promotion Board to fully own its Indian subsidiary, Uninor. Also, Russia?s Sistema has sought approval to raise its stake in Sistema Shyam above the previous limit of 74 per cent.
