Smantha Sen

Even though, the move to enact an umbrella legislation to screen all FDI proposals from security point of view is facing opposition from certain government quarters, the proponents believe that a clear legislation will remove the element of subjectivity and make the screening process transparent and non-discriminatory.

As of ow, the foreign investment promotion board(FIPB) screens all FDI proposals that come through the approval route.

"A seperate legislation will be effective as it will bring about transparency.Moreover, the element of subjectivity will be removed and a non discriminatory approach will be adopted in clearing FDI proposals.The legislation which may include security issues that are sector, company and area specific will be drafted after consensus is arrived.

The issue of drafting specific guidelines to address security concerns on foreign investment in sensitive sectors was first debated in 2002.A committee of secretaries headed by cabinet secretary BK chaturvedi recently mandated the national security council to draft the proposed National Security Exception Act and suggest various amendments to the Foreign Exchange Management Act to take care of security considerations.

"In any case , even if a separate legislation is drafted a counter reference will have to be provided in the Fema for which suitable amendments will have to be made".