Govt examining foreign fund flows in infrastructure

The government has initiated a review of foreign fund flows in sensitive like telecom and physical infrastructure at strategic locations of the country, according to sources.

A comprehensive review has been undertaken to assess the control over various infrastructures at strategic locations and border areas of the country, the sources said.

Given the fact that majority of the industries are now under automatic route for foreign direct investment (FDI) rather than the approval route, the sources said, it is required to have an idea on the foreign presence in these areas including the northeastern region.

Keeping in view the strategic importance, the sources said, the government decided against the closure of Bharat Sanchar Nigam Ltd. The state-owned telecom company has a strong network at border areas.

Many departments and agencies, including the Reserve Bank of India (RBI), have been involved in the exercise.

The RBI is also examining the need for greater scrutiny of the FDI coming through the automatic route where companies are only required to inform the regulator about the fund flow within a stipulated time.

Most countries do not allow foreign players to participate in strategic infrastructure projects.

Recently, Commerce and Industry Minister Piyush Goyal said any country discriminating against Indian companies in the award of contracts would not be allowed to participate in public procurement contracts.

"When we took the stand not to be a part of RCEP (Regional Comprehensive Economic Partnership), one of the major stumbling blocks was also the fact that our businesses in the areas of our strength do not get an equal and fair opportunity when it comes to engaging with contracts or businesses in other geographies," he had said.

The minister also said he had not heard that China ever opens up any of its government contracts.

"They (China) are never opened up for international competition in the garb of being public procurement. In many other ASEAN (Association of Southeast Asian Nations) countries, even Japan and South Korea, the kind of conditionalities that they put don't allow too many of our companies to participate in tenders in those countries," he said.