No security concerns on 100% FDI in telecom: Sibal

No security concerns on 100% FDI in telecom: Sibal

With the Centre decided to raise foreign direct investment (FDI) limit in the telecom sector from 74 per cent to 100 per cent, telecom operators might have to procure indigenously produced telecom equipments to address security concerns.

"Hundred per cent FDI has nothing to do with security. Telecom Ministry fully supports 100 per cent FDI in telecom. Real security issue is on the manufacturing side," Telecom Minister Kapil Sibal told reporters here.

The Ministry of Home Affairs earlier had raised concerns on increasing FDI limit in telecom sector saying it would be threat to internal security.  The Home Ministry also raised apprehension that telecom operators may also comprise the data of telecom consumers.

Dismissing such concerns, Sibal said the government will encourage telecom operators to invest in manufacturing sector so that they can use indigenously produced equipments like chips, telecom gears and routers.  He also said all telecom companies working in India should be abide by Indian law.

The Government will also introduce Preferential Market Access policy that allow telecom operators to purchase domestically manufactured sensitive telecom and electronic equipments and technology.

Sibal, who has been batting for rising FDI cap said,  “Increasing the foreign investment cap was inevitable as the sector needed Rs 5 lakh crore investments in next five years”.

Private sector dominates Indian telecom market with 80 per cent market share. According to telecom regulator TRAI, only 12-13 per cent of all local products made with the aid of foreign vendors were used in the sector during 2009-10. However, Indian products formed just 3 per cent of the market.

Comments (+)