100% foreign participation in the Telecoms sector now allowed via the Automatic Route

06 Oct 2021

On October 7 2021, the Government of India announced that it would allow 100% foreign participation in the telecom services industry, including all telecom services and infrastructure providers, through the Automatic Route.

Under the Automatic Route, the non-resident investor or the Indian company does not require any approval from Government of India for the investment. The Indian Government already allows FDI to enter via the automatic route in several industries. Still, foreign investors must get government permission in areas such as defence, media, pharmaceuticals, and insurance. Until the recent announcement, FDI in telecommunications was capped at 49% via the automated route, and everything beyond that had to obtain case-by-case approval through the government channel.

However, any FDI in telecom services from a country with whom India shares its land border still requires government approval.