Rajeev Chandrasekhar's official website - Member of Parliament

 

GOVERNMENT OF INDIA

Ministry of Finance

DEPARTMENT OF ECONOMIC AFFAIRS

RAJYA SABHA

UNSTARRED QUESTION NO 1160

TO BE ANSWERED ON TUESDAY, MARCH 11, 2008 PHALGUNA 21, 1929 (SAKA) 

 Laws on foreign Ownership of Sensitive Sectors .

1160.

SHRI RAJEEV CHANDRASEKHAR

 

 

Will the Minister of FINANCE be pleased to state:-

(a) whether our foreign ownership laws for sensitive sectors have enough safeguards to ensure that foreigners cannot own more than a minority stake and that they cannot run those ventures behind the scene; and

(b) what specific measures are in place to ensure that these sectoral limits are not indirectly breached?

ANSWER

MINISTER OF STATE IN THE MINISTRY OF FINANCE

(SHRI PAWAN KUMAR BANSAL)

(a) and (b): Foreign ownership of any corporate body has to be consistent with FDI Policy of the Government. In certain sectors the FDI cap has been kept below 50% while most of the sectors are put on automatic route. Certain categories of cases are to be approved by the Foreign Investment Promotion Board (FIPB), taking into account the sensitivity of the sectors. FIPB is an inter-ministerial body which looks into all relevant aspects while granting approval.

Foreign Exchange Management (Transfer or Issue of Security by a Person Resident Outside India) Regulation 2000 is notified under the Foreign Exchange Management Act, 1999(FEMA). Necessary action can be initiated under FEMA for any violation of FIPB approval or conditions imposed by it.