The Telecom Commission has approved a proposal to allow 100 per cent foreign investment in telecom service providers, official sources said today.
The telecom regulator's approval comes on the back of recommendation by a committee headed by finance secretary Arvind Mayaram for allowing increased foreign investment in sectors like defence, telecom, retail and commodity exchanges to revive investments.
The Indian government is trying to attract long-term investment as it strives to contain widening current account deficit brought about by short-term currency flows.
The government currently allows foreign participation of up to 74 per cent in local telecom service providers.
Allowing full foreign ownership will mean companies such as Vodafone Group Plc, Telenor ASA and Sistema will not need Indian partners to operate in the country.
The recommendations will now have to go through the Department of Industrial Policy and Promotion (DIPP), which will send a final proposal after consultations with other ministries.
"We have said it should be done in consultation with home and other concerned ministries," the official said.
The home ministry, however, has raised security concerns over further opening up sectors like telecom, defence and civil aviation.