The Indian government is reportedly planning to ease the foreign direct investment caps for defense and telecom. Bloomberg has been told by the officials from Finance Ministry that the government is planning to do so in order to boost the Indian currency which has constantly been depreciating against dollar, amongst other reasons. Also Read - Aircel-Maxis deal: Supreme Court says no to stopping CBI charge sheet against Maran
According to the report, the government might simply dissolve the cap on foreign-direct investment in telecommunications and let the foreign investors own all stakes in a telecom company, instead of the 74 percent maximum limit at present. For defense, the government is considering to raise the cap to almost double than earlier, letting the foreign investors to own 49 percent instead of the 26 percent cap. These changes are expected to be introduced in late June or early July.
In fact, the report suggests that the government might announce these changes in the FDI policy for defense and telecom segment without approval from Cabinet or Parliament.
It was back in March that finance minister Palaniappan Chidambaram stated that the government has started reviewing the foreign-direct investment caps to push the Indian economical conditions and revive its growth. This news is a part of the reviewing part of FDI policies. This apart, the government might also bring minor changes in other industries.