Policy soon on FDI in sensitive areas, sectors

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14 FDI proposals worth Rs 826 crore cleared

New Delhi, Jul 17: India will soon have a policy on foreign direct investment (FDI) in sensitive areas and sectors. The ministry of home affairs (MHA) has readied a FDI policy note for vetting by the cabinet committee on security (CCS).

Confirming the move, a senior government official said cabinet secretary KM Chandrasekhar has scheduled a meeting of the committee of secretaries (COS) on FDI policy later this month.

Sources said the meeting will discuss key issues in the policy, like building up Indian capabilities, visa regime and country-specific exclusion.

An important element of the policy would be the definition of sensitive areas. According to MHA’s definition, any project that falls within 50 km of international borders is a sensitive project.

But many ministries oppose this. The department of heavy industry has suggested that sensitive areas should include a distance of 150 km from international borders, in addition to the whole states of Jammu & Kashmir, Himachal Pradesh, Uttarakhand & Northeastern states. “The CCS will take a final view on this issue,” a senior government official said.

The FDI policy paper has also proposed that multilateral agencies be pursued to accept the provision of prior security clearance for foreign manpower engaged in construction activities under the National Security Clause.

On country-specific bans, it is proposed that there should be a case-by-case security vetting of sensitive projects instead of a blanket country-specific ban. In contrast, the finance ministry has been recommending, especially for hydro-power projects, inclusion of an upfront country-specific ban in international tender documents.

On the visa regime, MHA has noted that foreign workers are entering on business visas. A separate project work visa, like in other countries, has been proposed. “This means that a foreign national should apply first for a work permit and after receiving the work permit, he may apply for a visa,” an official said.