New Delhi: The government has hiked foreign direct investment (FDI) limit in the telecom sector to 74 per cent. Announcing the cabinet decision, finance minister P Chidambaram said that the FDI cap has been hiked but certain security conditions will be in place.

Communications minister Dayanidhi Maran has said that this alone will result in a 20 per cent jump in foreign investments in the telecom sector within the next two years from the current Rs10,000 crore.

The conditions that telecom companies, which allow a hike in their FDI will have to comply with include a clearance from the Foreign Investment Promotion Board prior to crossing the existing 49 per cent FDI cap; prove to the government every six months that they have not crossed the 74 per cent limit; ensure that its foreign investors don't have access to technical information; the chairman, CEO, chief technical officer and the majority of its board members have to be resident Indian citizens; security agencies will have to be given blanket access to all traffic.

If any of these provisions are violated, the company's agreement will automatically be terminated. The government says such safeguards are essential so that India's security is not compromised.