The Central government has initiated a review of foreign fund flows in sensitive sectors such as telecom and physical infrastructure at strategic locations in the country, according to sources. A comprehensive review has been undertaken to assess the control over various infrastructure projects at strategic locations and border areas, sources said.
With a majority of the industries are now under automatic route for Foreign Direct Investment (FDI) rather than the approval route, it is crucial to have an idea about the foreign presence in these areas, including the northeastern region, they said. Keeping in view the strategic importance, the Centre has decided against the closure of State-owned BSNL, which has a strong network in border areas.
Many departments and agencies, including the Reserve Bank of India (RBI), have been involved in the exercise. The RBI is also examining the need for greater scrutiny of the FDI coming through the automatic route where companies are only required to inform the regulator about the fund flow within a stipulated time.
Most countries do not allow foreign players to participate in strategic infrastructure projects.
Recently, Union Commerce and Industry Minister Piyush Goyal had said that any country discriminating against Indian companies in the award of contracts would not be allowed to participate in public procurement contracts.
“When we took the stand not to be a part of RCEP (Regional Comprehensive Economic Partnership), one of the major stumbling blocks was also that our businesses in the areas of our strength do not get an equal and fair opportunity when it comes to engaging with contracts or businesses in other geographies,” Goyal had said.
Goyal also said he had not heard that China ever opens up any of its government contracts. “They have never opened up for international competition in the garb of public procurement. In many other ASEAN countries, even Japan and South Korea, the kind of conditionalities they put do not allow too many of our companies to participate in tenders in that country,” he had said.