New Delhi: The Union Cabinet on Thursday 'broadly' approved the proposal for enhancement of Foreign Direct Investment (FDI) limit to up to 74 per cent in the telecom sector.
The final and revised guidelines are in the process of being redrafted and would get the final nod in the first week of January, said Finance Minister P Chidambaram.
The Cabinet has also extended the deadline for telecom operators to comply with the revised guidelines by three months till March-end 2007 for enhanced FDI limit of 74 per cent.
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.
The Government had earlier this year allowed 74 per cent FDI in telecom but the policy could not be implemented due to differences among the ministries over various clauses including national security.
"The position of chairman, managing director, CEO 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," a draft note on FDI in telecom had pointed out.
It added that security vetting would be required periodically on an annual basis.
The DoT had sought three months extension in October to revise the norms for 74 per cent FDI and resolve differences with other ministries.
The draft note also said that the officers of the licensee companies dealing with the lawful interception of messages will be resident Indian citizens.
According to the note, which was considered in the meeting on Thursday, security conditions would be applicable to all the license telecom services companies covered under the Press Note irrespective of the level of FDI.
FDI up to 49 per cent 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 per cent, the note said.
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