RS members cutting across party lines support bill to set up panel to vet FDI in critical infra, technology

Several Rajya Sabha members cutting across party lines on Friday supported a private member's bill, which seeks to set up a committee to scrutinise foreign investments in financial services, critical infrastructure and techlogy sectors having bearing on national security.

Members hailing from  BJP, Congress and or parties raised concerns over data security and said it was an issue of national security and that re was a need to ensure that foreign direct investments (FDI) in sectors such as financial services are scrutinised.

members were taking part in a debate on Foreign Investment in Financial Services, Critical Infrastructure and Techlogy Affecting National Security (Regulation) Bill, moved by Narendra Jadhav, a minated member of Rajya Sabha. bill was moved by Jadhav on December 6, 2019 during last session, but he could t conclude his opening speech n. He concluded his submission on Friday.

According to Jadhav, FDI level has increased to an unprecedented level USD 284 billion and "we are still giving a free hand to foreign investors" in sensitive areas such as financial sectors in rapidly changing digital environment. "What about NBFCs and payments firms. re is limit for foreign ownership of NBFCs. 100 per cent ownership is allowed in this through automatic route," he said.

"Can we simply sit and allow foreign firms have controlling stake in NBFCs and payment firms? We simply cant. cost of inaction would be huge national security risk. re is also absence of data protection law in this country and we are finally moving in that direction," said Jadhav, who is also an ecomist, educationist and public policy expert. This will make personal and financial data of millions of Indians available to foreign governments, which would include data of key politicians and military personnel, and "this could be misused and weaponised".

"se data could be misused and undermine our national security. We must act and act without any furr delay," he said. bill seeks to establish a committee on foreign investment headed by ecomic affairs secretary to effectively guard against risk to national security posed by certain types of foreign investment in financial services, critical infrastructure and techlogy sectors.

Citing an example, Jadhav said that two years ago US government had thwarted attempts by Chinese ecommerce major Alibaba founder Jack Ma's plan to acquire money transfer company MoneyGram over national security concerns. MoneyGram was to be bought by Ant Financial, a financial services and payment processing company Ma owns.

Moreover, even a country like China has limited FDI in finance sector to around 1.5 per cent. Even countries such as Malaysia, Thailand and Indonesia allow only 25 to 40 per cent FDI in finance sector, but India has allowed 74 per cent. "Why we are so desperate or too liberal to get it," he said.

Participating in debate on bill, BJP member Shiv Pratap Shukla said that in current scenario, FDI is necessary for growth of ecomy, but it should t be above national security concerns. Anil Desai of  Shiv Sena said re should be a high- powered committee to scrutinise such FDI proposals. Ram Kumar Verma of  BJP said re should be due diligence by committee on foreign investments as suggested by Jadav.

Supporting bill, Congress member Rajeev Gowda said re was a need for wider participation in a committee on FDI that currently includes government secretaries and officials. He suggested that security experts and or sections of people are taken on board of panel, who should be equal members.

BJP member D P Vats, RJD's Maj Jha and T K S Elangovan also supported bill. BJP members Ashok Bajpai, Mahesh Poddar and Vikas Mahatme were of view that re were eugh safeguards in place to deal with any such security challenge.