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The country's telecom sector has received a cumulative foreign direct investment (FDI) of USD 12,865 million (Rs 58,782 crore) in the last 13 years, which comprises 7% of the total FDI inflows.
"The telecom sector has attracted FDI inflows of Rs 58,782 crore from April 2000 till May 2013," Minister of State for Communications and IT Milind Deora said.
However, FDI in the sector, which includes radio paging, cellular mobile, basic telephone services, plunged 81.64% in 2012-13 to Rs 1,654 crore mainly on account of economic slowdown and tough regulatory environment in the country. As per the Department of Industrial Policy and Promotion (DIPP), the country has received Rs 9,012 crore as FDI inflows in 2011-12.
Deora said with a view to provide clear road map and policy framework for the telecom sector, the government has already reviewed the telecom policies following a consultative process and announced the NTP 2012 in June 2012.
"By formulating a clear policy regime, NTP-2012 endeavours to create an investor friendly environment for attracting additional investments in the sector and provides clear roadmap to address policy and regulatory issues to improve the health of the telecom sector," Deora said.
The government has also approved 100% FDI in the sector, meeting a key demand of the fund-starved industry.
The idea behind increasing the FDI limit in the telecom sector was to help the industry get fresh funds to lower financial burden.
"The enhancement of FDI cap is expected to facilitate capital inflows as well as ability of existing service providers to access lower cost financing," Deora added.
