Telenor’s investment into Unitech’s telecom in India has now got stuck at the Foreign Investment Promotion Board (FIPB), reported NDTV. Citing sources, NDTV reports that the Indian Home Ministry has sought more time to study the proposal since Telenor operates in countries like Pakistan and Bangladesh.
TV report says that proposal had come up before the FIPB earlier this week and a decision on allowing the investment into the company was deferred. A clearance from the FIPB is mandatory for Unitech for Telenor’s investment in the company to go through.
Following is the excerpt from NDTV’s website:
Unitech told NDTV that since they have not heard from the government regarding the issue, they would not like to comment upon this issue.
The government views telecom as a strategic sector and follows a stringent process of due diligence. Investment proposals from global telecom companies that operate in ‘non-friendly’ countries is also closely monitored by the government. In fact, the security agencies have recently questioned the move by government-run BSNL and MTNL to buy telecom equipment manufactured by Chinese telecom companies.
Unitech hopes to start services by the end of the year in one of the states of south India.
This is not the first time that the government has raised the issue. Russian telecom company ByCell’s India plans were nixed after FIPB withdrew permission given to its investments. Home Ministry and Finance Ministry had asked FIPB to reconsider the application after concerns on the source of funds for the company.