OGL objection criticised

In what promises to minimise bureaucratic hassles, the finance ministry has termed "meaningless" the objections to foreign investment proposals of companies for importing goods into the country under the open general licence (OGL) scheme.

This observation was made by the ministry on a proposal by US-based Verint Systems Inc to set up a 100 per cent subsidiary in India to stock and do wholesale trading of its range of communication products meant for interception, digital video security and surveillance.

Although 100 per cent foreign direct investment is permitted in wholesale (cash and carry) trading, the ministries of home and defence and the department of telecom had objected to the proposal and conveyed their decision to the Foreign Investment Promotion Board. Following the objections, the FIPB had rejected the proposal in a meeting on March 17.

However, after the finance ministry termed the objections "meaningless", the proposal was put up once again for the reconsideration of FIPB, which has now asked for a detailed report from the department of telecom on the issue.

The telecom department had earlier said it would have no objections to the proposal provided the concurrence of the home and defence ministries was obtained.

It is interesting to note that the FIPB chairman, at a board meeting on January 12, 2005, had observed that since these equipment could be freely imported under the OGL scheme, any restriction on Verint System's proposal would not have any adverse impact.

According to sources, Verint Systems has already provided communication monitoring and interception systems to some Indian telecom service providers.

When the import of a product is allowed under the OGL scheme, any company with a licence can import any item under that category and does not require an item-specific import permit.