NEW DELHI, July 2 (Reuters) - India's Telecom Commission hasendorsed a proposal to increase foreign holding ceiling in phonecarriers to 100 percent, a senior government official said onTuesday.
A panel headed by a senior finance ministry official earlierproposed to allow more foreign investment in sectors likedefence, telecom, retail and commodity exchanges to reviveinvestments and attract long-term investment as the governmentstrives to contain its widening current account deficit.
India currently allows foreigners to hold a maximum 74percent in local phone carriers. Allowing full foreign ownershipwill mean companies such as Vodafone Group Plc, TelenorASA and Sistema will not need Indian partnersto operate in the country.
The Telecom Commission, the highest decision-making body inthe telecommunications ministry, will send its recommendationsto the Department of Industrial Policy and Promotion (DIPP), thegovernment official said. The DIPP after consulting otherministries will send a final proposal to be approved by thefederal cabinet, the official added.
"We have said it should be done in consultation with homeand other concerned ministries," the official said.
Media reports have said the home ministry has raisedsecurity concerns over further opening up sectors like telecom,defence and civil aviation.
However, another senior government official, who deals withforeign investment issues, said the licensing rules for telecomcompanies already took care of security concerns.
Sistema's Indian unit said in a statement on Tuesday itsupports 100 percent foreign holding in telecoms companies,calling it a pro-industry and pro-consumer move.