New Delhi, Feb 06: Two visiting US officials favoured raising of FDI-FII cap on telecom in India, saying the sector has emerged from the slum of the last two-three years and should be allowed to source capital from anywhere in the world.

Clarifying that he did not have the intention of suggesting anything on the issue to the Indian government, US Deputy Assistant Secretary Of State David A Gross said pegging the cap at 49 per cent does not allow Indian telecom players to benefit from flow of capital.
:Telecom is a highly capital intensive business and as such should be allowed to draw capital from every source. It will lead to lower tariffs for customers as more and more foreign players join the telecom sector,” he said.
US Acting Assistance Commerce Secretary Michael D Gallagher said the cap affects capital flows into the telecom sector of India.
Gross said the United States has also experienced similar restrictions as is being in India. There were strict restrictions on the sector in the US in 1934 but now foreign players can own cent per cent of US telecom companies.
When pointed out that the Indian government had withheld its approval to raising FII-FDI cap on telecom to 75 per cent on security concerns, Gallagher said there are other means to address the concerns than restricting the ownership of telecom companies.
While the group of ministers on telecom has recommended raising of the cap, the cabinet has deferred its approval on security concerns. The move snowballed into a major issue when, according to reports, Telecom Minister Arun Shourie among others invoked the security clause to scuttle the open sky policy at the cabinet meeting yesterday.
Shourie, among two other cabinet colleagues, reportedly opposed the proposed policy over the ownership of Jet Airways on the ground that it could compromise the country's security. Bureau Report