Mumbai: The prime minister''s office (PMO) has
proposed umbrella legislation that would give the government
powers to suspend foreign investments in sensitive sectors
and locations on national security considerations. The
PMO has sought the opinion of various ministries for
follows a proposal by the National Security Council
to formulate a ''National Security Exemption Act'' to
give powers to the "government to suspend or prohibit
any foreign acquisition, merger or takeovers of an Indian
company that is considered prejudicial to national interests."
NSC has suggested security screening of foreign participation
in sensitive sectors like seaports, airports, telecom,
Internet service providers, international long distance
telecom services, oil refining, gas pipelines, oil and
gas exploration, shipping, metallurgy, defence, data
processing and pharmaceuticals.
has also suggested security screening for investments
in sensitive locations like Jammu and Kashmir, Chhattisgarh
and North Eastern states and areas near vital nuclear,
space and defence installations as also border areas.
NSC has suggested curbs on investments from veritable
tax havens like Mauritius, Cyprus and Cayman Islands
as criminal groups operating from other countries could
pose a security threat. Also, as the source of money
could be illegal, it could be used to create economic
crisis through sudden withdrawal or pumping in, it pointed
list of countries of concern from where free flow of
be freely allowed also include China, Hong Kong, Macau,
Taiwan, Pakistan, Bangladesh, Afghanistan and North
Korea that could threaten security interets as the entities
from these countries could be manipulated.