India approves foreign investment cap increase to 74%

21 Oct 2005

India’s federal Cabinet late yesterday approved a proposal to raise the foreign investment cap in the country’s telecoms sector from 49% to 74%. The 74% foreign investment can be made directly or indirectly in an operator or through a holding company, whilst 26% must be owned by resident Indian nationals or domestic companies. The decision is expected to assist in driving further growth in one of the world’s fastest growing markets. Local telcos have long argued for increasing the FDI cap, saying that it will help them expand into underdeveloped rural areas that account for nearly 75% of India’s population.