British telecom major Vodafone plans to invest billions of dollars in India, according to Telecom Minister Kapil Sibal, who feels foreign investors are back in the mood to invest in the country. This is notwithstanding the problems the company is facing on the tax front.
Investors’ renewed confidence to pump money in India’s telecom sector is due to the new policy that has a clear roadmap for the next 20 years, he said.
“Foreign investors have all come to me and said that they are very keen to invest more. As we talk, Vodafone has agreed to invest billions of dollars more in the sector itself,” Sibal said, adding that the Vodafone chief had expressed plans to expand operations in India.
Liberal policy
Significantly, Vodafone’s plans to invest more in India come at a time when the Government has initiated steps for an out-of-court settlement with the company on its Rs 11,217-crore tax liability dispute. Sibal insisted that there was no connection between the two developments.
“No, no... it’s nothing to with this. It’s something to do with the environment that we have cleared for the next 20 years. We have a policy which will apply for the next 20 years and that policy is a liberal policy. We are going to have new merger and acquisition guidelines. We are now going to a uniform (unified) licence,” he said.
The Minister said the new policy regime in the telecom and IT sector has started attracting foreign investors.
“On the ESDM (electronics manufacturing) side we have got proposals worth Rs 4,000 crore,” he said.
Sibal pointed out that the telecom sector has been in bad shape because domestic banks have been reluctant to fund it, as some of the investors were hit by the cancellation of 122 2G telecom licences in February 2012. The cumulative debt on the Indian telecom sector is around Rs 2,50,000 crore and the companies have been struggling to pay back these debts.