New Delhi: Relaxing the foreign direct investment (FDI) caps for the cable, DTH and broadcasting platforms (from 49% to 74%) has become a contentious issue with the ministry of home affairs (MHA) and the information and broadcasting (I&B) ministry sparring over concerns flagged by the former.
Sources said MHA wants a mandatory security clearance for all shareholders of foreign companies/investors who want to infuse capital in the DTH, cable distribution firms and other cable delivery platforms. However, the I&B ministry says MHA should give commitment of a minimum time-limit in which it shall process all such foreign investment cases in the sector else the security clearance should only be mandatory for the board of directors of the investing firms.
‘‘MHA does have genuine concerns but is it possible to obtain security clearances of lakhs of shareholders in a foreign entity who wants to invest in a DTH/cable company here? The information and broadcasting ministry wants MHA to give a time-frame of three-months within which they will process the applications from foreign investors and we will agree with what MHA wants,’’ a senior government official told FE. The I&B ministry sent out its written response last week after MHA’s concerns were intimated to it 10-days ago.
The MHA also wanted the I&B ministry to ensure that all licence holders for IPTV services will need to have the licence for ISP services too.
However, the I&B ministry feels that all IPTV providers, in order to compete in the business, do enter into tie-ups with ISP providers and the status-quo should prevail. ‘‘MTNL has a tie-up with Aksh Optifiber for IPTV services. What role can the I&B ministry do in this case?,’’ said the official quoted above.
According to sources, I&B ministry Ambika Soni is expected to speak to home minister P Chidambaram in the mattersoon in order to clear the way for the department of industrial policy and promotion (DIPP) to move the matter for the consideration and approval from the Union Cabinet. ‘‘It should not take more than two-three weeks now,’’ the official said.
The cash-strapped DTH and cable industry has been waiting for the relaxed FDI regime for nearly a year. Sources said, because of MHA raising repeated concerns over security issues related with relaxing the FDI norms, the matter has been stuck for nearly six-months despite the sector regulator recommending increasing the FDI caps for DTH and cable platforms from 49% to 74% and I&B ministry endorsing these recommendations.
As reported by FE in February, the Indian security agencies had red flagged the potential security hazard of an influx of cable and DTH hardware’s and machines from countries like China and Taiwan to Indian households post-relaxation of FDI caps.
As reported earlier,
http://www.financialexpress.com/news/i&b-mha-spar-over-fdi-in-dth/975284/3
Sources said MHA wants a mandatory security clearance for all shareholders of foreign companies/investors who want to infuse capital in the DTH, cable distribution firms and other cable delivery platforms. However, the I&B ministry says MHA should give commitment of a minimum time-limit in which it shall process all such foreign investment cases in the sector else the security clearance should only be mandatory for the board of directors of the investing firms.
‘‘MHA does have genuine concerns but is it possible to obtain security clearances of lakhs of shareholders in a foreign entity who wants to invest in a DTH/cable company here? The information and broadcasting ministry wants MHA to give a time-frame of three-months within which they will process the applications from foreign investors and we will agree with what MHA wants,’’ a senior government official told FE. The I&B ministry sent out its written response last week after MHA’s concerns were intimated to it 10-days ago.
The MHA also wanted the I&B ministry to ensure that all licence holders for IPTV services will need to have the licence for ISP services too.
However, the I&B ministry feels that all IPTV providers, in order to compete in the business, do enter into tie-ups with ISP providers and the status-quo should prevail. ‘‘MTNL has a tie-up with Aksh Optifiber for IPTV services. What role can the I&B ministry do in this case?,’’ said the official quoted above.
According to sources, I&B ministry Ambika Soni is expected to speak to home minister P Chidambaram in the mattersoon in order to clear the way for the department of industrial policy and promotion (DIPP) to move the matter for the consideration and approval from the Union Cabinet. ‘‘It should not take more than two-three weeks now,’’ the official said.
The cash-strapped DTH and cable industry has been waiting for the relaxed FDI regime for nearly a year. Sources said, because of MHA raising repeated concerns over security issues related with relaxing the FDI norms, the matter has been stuck for nearly six-months despite the sector regulator recommending increasing the FDI caps for DTH and cable platforms from 49% to 74% and I&B ministry endorsing these recommendations.
As reported by FE in February, the Indian security agencies had red flagged the potential security hazard of an influx of cable and DTH hardware’s and machines from countries like China and Taiwan to Indian households post-relaxation of FDI caps.
As reported earlier,
http://www.financialexpress.com/news/i&b-mha-spar-over-fdi-in-dth/975284/3
