The Hindu Business Line : `Decision on telecom FDI hike only after polls'

The Minister for IT and Communications, Mr Arun Shourie, with the Vice-President, Gartner, Mr Bertrand Bidaud, at the Gartner Telecom Summit 2004 in the Capital on Tuesday. - Ramesh Sharma

New Delhi , Feb. 17

A DECISION on hiking the foreign direct investment (FDI) limit in telecom to 74 per cent from the existing 49 per cent will be taken only after the general elections, according to the Union Communications Minister, Mr Arun Shourie.

Speaking to newspersons at the Gartner Telecom Summit 2004, he noted, "It is a matter to be addressed after elections depending on Government portfolios. Only the Prime Minister and Deputy Prime Minister can decide on the issue," he said.

Mr Shourie also said the Department of Telecommunications (DoT) would issue a notification on intra-circle mergers and acquisitions in the next couple of days. This is expected to benefit bigger cellular operators such as Bharti, Hutch and Idea Cellular who have expressed their intention to buy out smaller cellular operators.

"The matter of intra-circle mergers and acquisitions will be put up to me tomorrow or the day after and I will be able to report on it in two days. I cannot say now whether the recommendations of the Telecom Regulatory Authority of India will be accepted in toto," he said.

It may be recalled that TRAI recently submitted its recommendations giving a green signal to intra-circle mergers, subject to certain conditions.

Mr Shourie also asked the domestic IT industry to tackle anti-outsourcing measures in the US by adopting a multi-faceted approach envisaging expansion into alternative overseas markets, such as Germany and China.

"The Commerce Minister has stated the Government's position in his talks with US Trade Representative on the issue, and the country's position is well known. It cannot be that developed countries start putting non-tariff barriers against us in areas where we have strengths. It happened in the case of bed linen, marine products, steel in the US and now it happened in BPO. This is an election year in the US and we should expect more of this. India's response needed to be multi-faceted," he said.

He noted that the IT industry should expand in the domestic market, focus on innovation, get into new overseas markets and adopt a low-key approach in its dealing with anti-outsourcing moves. India's offerings should be so useful to corporates that those companies in turn convince the US administration that not outsourcing to India would deprive them of competitive advantage. Mr Shourie also said alternative markets such as Germany, China and Japan ought to be tapped.

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