Finance ministry opposes country-specific FDI restrictions
03 Nov 2006
New Delhi: The finance ministry has opposed restricting FDI inflows in to the country solely on the criteria of the country of origin of the investment. It has instead mooted a case-by-case scrutiny to address security concerns, in response to a note by the national security adviser, circulated by the prime minister's office.
Though the ministry agrees to a complete scrutiny of all FDI proposals, it has opposed any discrimination against FDI, vis-a-vis domestic investment, saying that no country should be singled out on security grounds.
In its note to the PMO, the finance ministry has said that while all security-related scrutiny should be made before the clearance of a FDI proposal, it should not be discriminated against once permitted.
It
says that security laws should be the same for FDI and
domestic investment. The
security issue in FDI arose after the investment of of
Egypt's Orascom Telecom in Hutchison-Essar became known
and attracted
criticism from the PMO for its potential threats to national
security overseas investments in strategic sectors like
telecom.
The
Department of Telecom also says that FDI and security
should be dealt with separately.
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