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On 15 September 2021, the Government issued a press release announcing various telecom reforms approved by the Union Cabinet. These reforms have been introduced in light of the struggles of the industry, especially the debt-laden telecom service providers.
Pursuant to these reforms, the Department for Promotion of Industry and Internal Trade, Government of India (“DPIIT”) issued a press release on 6 October 2021 amending the Consolidated FDI Policy Circular of 2020 (“FDI Policy”) by approving FDI in this sector up to 100% without any Government approval, i.e., through the automatic route. This is applicable for telecom services, including for telecom infrastucture providers, other service providers, internet service providers, satellite communications etc.
This significantly liberalises the erstwhile FDI limit of 49 % through automatic route and beyond that (up to 100%) with Government approval, in line with the Government’s objective to infuse liquidity into this sector. This certainly looks to be a promising endeavour which is likely to boost the growth of this sector and introduce emerging technologies in India.
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