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FDI Compliance Deadline Extended
Techtree News Staff, Dec 22, 2006 1254 hrs ISTThe Union Cabinet has broadly extended the deadline for telecom operators to comply with revised guidelines for enhanced FDI in Telecom.
The Union Cabinet has broadly extended the deadline for telecom operators to comply with the revised guidelines for enhanced Foreign Direct Investment (FDI) limit of 74 per cent.
The Cabinet, which met at the Prime Minister's residence yesterday, allowed a three months extension, till March-end 2007, to telecom operators. This is the fourth time the deadline has been extended to allow companies for abiding by the new guidelines for enhanced FDI in telecom since it was announced in February this year.
In a statement, Union Minister for Finance, P Chidambaram, said that the Department of Telecommunication's (DoT) note on FDI in telecom was discussed in the meeting, and has been referred to a group of officers headed by the cabinet secretary to redraft the norms with regard to remote access on fixed line phone connection (PSTN).
The government had earlier this year allowed 74 percent FDI in telecom but the policy could not be implemented due to differences among the ministries over various clauses including national security.
Chidambaram also said that the final and revised guidelines are in the process of being redrafted, and would get the final nod in the first week of January next year. The appointment for foreign CEOs will also be a part of the revised and final nod from the cabinet.
DoT has proposed that the Chief Officer In-charge of Technical Network Operations, the Chief Security Officer, and majority of the Directors should be resident Indian citizens.
A draft note on FDI in telecom had pointed out that the position of Chairman, Managing Director, Chief Executive Officer, and Chief Financial Officer, if held by a foreign national, the same will be required to be security vetted by the Ministry of Home Affairs. Besides, the security vetting would be required periodically on an annual basis.
The DoT had also sought three months extension in October to revise the norms for 74 percent FDI, and resolve differences with other ministries.
The draft note, which was considered in the meeting yesterday, also said that the officers of the licensee companies dealing with the lawful interception of messages would be resident Indian citizens. Moreover, security conditions would be applicable to all the license telecom services companies covered under the Press Note, irrespective of the level of FDI.
According to the note, FDI up to 49 percent would continue to be on automatic route and Foreign Investment Promotion Board (FIPB) approval would be required for FDI in companies if it has a bearing on the overall ceiling of 74 percent.
The Cabinet, which met at the Prime Minister's residence yesterday, allowed a three months extension, till March-end 2007, to telecom operators. This is the fourth time the deadline has been extended to allow companies for abiding by the new guidelines for enhanced FDI in telecom since it was announced in February this year.
In a statement, Union Minister for Finance, P Chidambaram, said that the Department of Telecommunication's (DoT) note on FDI in telecom was discussed in the meeting, and has been referred to a group of officers headed by the cabinet secretary to redraft the norms with regard to remote access on fixed line phone connection (PSTN).
The government had earlier this year allowed 74 percent FDI in telecom but the policy could not be implemented due to differences among the ministries over various clauses including national security.
Chidambaram also said that the final and revised guidelines are in the process of being redrafted, and would get the final nod in the first week of January next year. The appointment for foreign CEOs will also be a part of the revised and final nod from the cabinet.
DoT has proposed that the Chief Officer In-charge of Technical Network Operations, the Chief Security Officer, and majority of the Directors should be resident Indian citizens.
A draft note on FDI in telecom had pointed out that the position of Chairman, Managing Director, Chief Executive Officer, and Chief Financial Officer, if held by a foreign national, the same will be required to be security vetted by the Ministry of Home Affairs. Besides, the security vetting would be required periodically on an annual basis.
The DoT had also sought three months extension in October to revise the norms for 74 percent FDI, and resolve differences with other ministries.
The draft note, which was considered in the meeting yesterday, also said that the officers of the licensee companies dealing with the lawful interception of messages would be resident Indian citizens. Moreover, security conditions would be applicable to all the license telecom services companies covered under the Press Note, irrespective of the level of FDI.
According to the note, FDI up to 49 percent would continue to be on automatic route and Foreign Investment Promotion Board (FIPB) approval would be required for FDI in companies if it has a bearing on the overall ceiling of 74 percent.
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