Main Article Content

Abstract

Economic history is evident of the fact that presently developed nations of the world developed with the help of foreign capital. For example, England borrowed from Holland in the 17th and 18th century, the United States borrowed from England and France, Russia borrowed from United States and China took the financial help from Russia. A developing country like India may need foreign capital on account of - Low Capital Formation, Need for High Level of Investment, Development of Basic Economic Infrastructure, Exploitation of Productive Resources, and Backwardness in Technologies, Making Balance of Payment Favorable, and Filling the Gap of Private Entrepreneurs. So, like other countries India also depends on foreign capital & technology for its economic development.  Since the introduction of `Manmohanomics’ during PV Narasimha Rao’s government in  1991, Foreign Direct Investment (FDI) has been looked upon as a tool to transform under developed countries into advanced nations. Since then every government has encouraged the expansion of FDI. When the Indian government opened up cellular telephony to private industry, several foreign investors were ready to enter India’s telecom sector. However beating other manufacturing and services sectors, Indian telecom had attracted major inflow of FDI since August 1991. According to the numbers published by Investindiatele.com (an online agency which tracks developments in the Indian telecom sector), Indian telecom has grossed actual FDI worth Rs 9576.40 crore during the period starting from late 1991 to early 2003. Of the total FDI inflow in Indian telecom sector, the major share has gone towards investment in holding companies followed by cellular network and manufacturing and consultancy. This paper is an attempt to study current international investment in telecommunications industry.  It is found that a stable, transparent and non-discriminatory regulatory system is the best way to attract more foreign investment. Foreign investment in telecommunications brings technology transfer, huge capital, and increased market competition, which help national telecommunications development. The implementation of liberalized telecommunication investment should produce considerable benefits not only within the country's telecommunication sector but also for the national economy as a whole.

Article Details