The Telecom Commission in its meeting held on 02.07.2013 approved the proposal for raising FDI limit for all telecom services including Telecom Infrastructure Providers upto 100% with 49% under automatic route, and beyond 49% through Foreign Investment Promotion Board (FIPB), subject to observance of security and license conditions by licensee as well as investors as notified by Department of Telecommunications (DOT) from time to time. The recommendation of the Telecom Commission was considered by Department of Industrial Policy & Promotion (DIPP) in consultation with concerned Ministries/Departments including Ministry of Home Affairs. The Government approved the proposal and Press Note No. 6 (2013 Series) dated 22.08.2013 was issued in this regard.

The enhancement of FDI cap is expected to facilitate capital inflows as well as ability of existing service providers to access lower cost financing resulting benefit to all service providers including MTNL and BSNL.

The information was given by the Minister of State in the Ministry of Commerce and Industry Dr. E.M. Sudarsana Natchiappan in Rajya Sabha today.

Foreign investment cap in telecom: automatic route allowed to a defined threshold; additional investment subject to prior approval. The policy permits full foreign ownership in telecom subject to a two tier entry regime: foreign investment up to a defined automatic threshold is allowed without prior approval, while investment beyond that threshold requires prior government approval, and all investments must comply with security and license conditions notified by the telecommunications authority; the measure was formalised by an official press note following inter ministerial consultation.