RBI brings investments in submarine cable systems under automatic route
01 April 2010
The Reserve Bank of India (RBI) today announced further liberalisation of overseas investment rules for Indian companies by extending the automatic route to investments in undersea cable systems.
Accordingly, "Indian telecom companies engaged in international long-distance services can now participate in a consortium with other international operators to construct and maintain submarine cable systems on co-ownership basis under the automatic route," the Reserve Bank of India (RBI) said in a notification issued today.
RBI has allowed authorised dealer Category - I banks to remit direct investment by Indian companies overseas, after ensuring that the Indian company has obtained necessary licence from the Department of Telecommunication, ministry of telecommunication and information technology, to establish, install, operate and maintain international long distance services and also by obtaining a certified copy of the board resolution approving such investment, RBI said in its notification.
RBI has asked Indian entities engaged in such investments to report the transactions to the authorised dealer Category - I banks in the format laid down for investments in overseas joint ventures.
RBI had, in an earlier notification, announced that Indian entities can invest in overseas unincorporated entities in the oil sector, up to 400 per cent of their net worth, under the automatic route.