Enhanced FDI ceiling of 74% in telecom

New Delhi: The Government today notified an enhanced Foreign Direct Investment ceiling of 74 per cent in telecom.

FDI upto 49 per cent would continue to be on automatic route.

The total composite foreign holding is including but not limited to, investments by FIIs, NRIs, FCCBs, ADRs, GDRs.

Convertible preference shares, proportionate foreign investment in Indian promoters/investment companies including holding entities, will be refered as FDI and will not exceed 74 per cent.

Thus 74 per cent FDI can be made directly or indirectly in the operating company or through a holding company.

The remaining 26 per cent to be owned by Indian companies.

According to the government statement, FDI should not exceed 49 per cent and the management remains with the Indian owners.

However, the foreign component in the total holding in the Indian public sector banks and FIs will be treated as an Indian holding.