Ministry Seeks FDI In SEZs Supervised

New Delhi: The defence ministry has warned against giving permission to FDI in special economic zones from countries of concern and unfriendly entities, asserting that a national security exception clause be introduced to regulate overseas investment. According to fresh norms being suggested by the ministry, foreign participation in sensitive sectors and from countries and entities of concern should be subject to appropriate screening irrespective of the fact whether the FDI is permitted via automatic route or the Foreign Investment Promotion Board. It also seeks an institutional mechanism for defining policies, which should include feedback and control.

Armed forces have urged the government to keep SEZs at least 10 km away from the country''s borders and 20 km from sensitive installations like airfields, radars and communication. The norms, which will govern approval of SEZs, also include a provision that IT and ITeS zones should also be at a distance from military installations to avoid interference with ground-to-ground communication and radar pick-up. The defence ministry, which is represented on the Board of Approvals, has also advised that SEZs in coastal areas should be cleared only after taking the view of the armed forces.