Barcelona: Welcoming India’s new FDI guidelines, corporate leader Sunil Mittal on Tuesday said it is now clearly understood by the foreigners and gives them a holistic understanding of the entire economy.
Commenting on the changes in the foreign direct investment guidelines on the sidelines of World Mobile Congress here, Mittal said, “It’s good to have a policy that is clearly understood by the foreigners.”
“Now it is very uniform across the sectors. For the foreigners, it gives a clear understanding of the entire economy, rather than a sector-by-sector view,” said the chief of India’s leading telecom player Bharti Airtel.
“In the new policy, issues about Indian control and management are very clearly defined,” he added.
Telecom sector figures among the top recipients of FDI in India over the recent past and Bharti Airtel itself has about 44-45% of foreign direct investment.
Asked if new guidelines would help Bharti raise fresh FDI, Mittal, however, said there were no plans to raise funds and therefore, the new policy was neutral for the company.
“We are not looking at any market right now. There is no target currently being looked at,” said the billionaire businessman to a query whether Bharti was looking at acquisitions.
“Market valuations are so low that no one is willing to sell,” Mittal said.
Earlier this month, the government paved the way for foreign firms to raise their equity in Indian joint ventures with changes in FDI policy that excludes indirect investment through domestic companies from overall sectoral ceilings.
“The foreign investment through (an) investing Indian company would not be considered for (calculating) the indirect foreign investment in (the) case of Indian companies ‘owned and controlled’ by resident Indian citizens and Indian companies owned and controlled ultimately by resident Indian citizens,” the new guideline says.
The government has said that the changes in the FDI policy were aimed at making it simple and transparent.
As per current rules, in a telecom joint venture ‘A’, the present guidelines would not allow a foreign partner to exceed, say, 60% (despite the FDI cap of 74%) in case the domestic partner’s own equity structure has FDI that indirectly works out 14% in ‘A’.
With changes in the rules, the foreign partner in venture ‘A’ can increase its stake (within the 74%) since the indirect FDI holding would not be taken into account while calculating the overall ceiling.