Publication

This paper explores the political economy of three significant policy decisions taken by the Congress - United Progressive Alliance (UPA) government between November 2005 and February 2006, which have improved the incentives for foreign investment in India's telecommunications sector. The paper argues that these decisions occurred due to the increasing sensitivity of the Department of Telecommunications (DOT) to the needs of the relatively smaller Indian service providers, who were dependent on foreign capital. The regulatory changes described in this paper include a reduction in the access deficit charge, a reduction in the long distance license fees and an increase in the foreign investment equity limit from 49 percent to 74 percent.