The much-awaited guidelines on foreign direct investment in telecom are expected to be notified this month with companies likely to be given a maximum of four months to comply with the 74 per cent foreign direct investment in the sector.
Enough time has to be given to them to be in line with the policy announcements, which could be four months, officials said, adding the discussions between the Department of Telecom and Foreign Investment Promotion Board had entered the last stage. The Union Cabinet had cleared the hike in FDI in telecom to 74 per cent in February.
The industry demand that the holding of public sector banks not be included in the 74 per cent FDI limit and be treated as domestic holding is also believed to have been taken care of.
The issue of only resident Indians remaining at the helm of affairs and other key positions in the telecom companies for security reasons, is also likely to be diluted. The government is also likely to relax the definition of resident Indians to give telecom companies more leeway in making key senior level appointments.
The government is also favourable to permit telecom companies outsource software processes to agencies from remote destinations. Cabinet had barred Indian telecom service providers from giving remote access to any equipment manufacturer or agency outside India for maintenance or repair.
"The total composite foreign holding, including, but not limited to investments by FIIs, NRI/Ovrseas Commercial Borrowing, FCCB, ADRs, GDRs, convertible preferential shares, proportionate foreign investment in Indian promoters/investment companies, including their holding companies etc, will not exceed 74 per cent," Cabinet had said.
Thus, 74 per cent foreign investment can be made directly or indirectly in the operating company or through a holding company.
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