Schedule I to the FEM (Non-debt Instruments) Rules, 2019: serial number 14 of the Table - telecom services

Schedule I explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.

Serial number 14 of the sectoral Table in Schedule I to the Foreign Exchange Management (Non-debt Instruments) Rules, 2019 is the telecom entry. Since October 2021 the whole of its cap is on the automatic route, the list of services has been widened to include Other Service Providers, and a single condition requires licensees, service entities and investors to observe the terms notified by the Department of Telecommunications. The Rules are made under clauses (aa) and (ab) of sub-section (2) of section 46 of the Foreign Exchange Management Act, 1999.

This article states the position as per the Rules notified on 17 October 2019 (S.O. 3732(E)) as amended by the notifications named in this article; the latest amendment consulted is S.O. 4870(E) dated 2 September 2026. Later amendments, press notes and sector regulators' conditions should be checked before acting. A foreign telecom or infrastructure group setting up in India can use our Indian subsidiary service.

All telecom services, including Telecom Infrastructure Providers Category-I and Other Service Providers, carry a cap of hundred per cent with the entry route "Automatic". The licensing, security and any other terms and conditions notified by the Department of Telecommunications from time to time must be observed by the licensee or entities providing the services as well as the investors. The automatic route does not displace the Government route that rule 6(a) imposes on investors from land-border countries.

The entry after the amendment

The Table prints the cap as a percentage figure; it is written in words throughout this article.

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Which notification changed what

S.O. 4242(E) came into force on the date of its publication in the Official Gazette.

What the entry said before. As notified in 2019, the route cell read automatic up to 49% and Government route beyond 49%; the list of services ended "except Other Service Providers"; and the condition allowed foreign investment in Other Service Providers up to the full cap under the automatic route. The 2021 notification removed the split, and brought Other Service Providers into the list itself.

Serial number 14.1: the services covered

The entry opens with "All telecom services including Telecom Infrastructure Providers Category-I", then gives a list introduced by "viz.":

• Basic and Cellular services;
• United Access Services (so printed), Unified license (Access services) and Unified License;
• National and International Long Distance;
• Commercial V-Sat;
• Public Mobile Radio Trunked Services (PMRTS);
• Global Mobile Personal Communications Services (GMPCS);
• all types of ISP licenses;
• Voice Mail, Audiotex and UMS;
• Resale of IPLC;
• Mobile Number Portability services;
• Infrastructure Provider Category-I, described in the entry as providing dark fibre, right of way, duct space and tower;
• Other Service Providers;
• such other services as may be permitted by the Department of Telecommunications.

The last item makes the list open-ended: a service that the Department permits later falls within the entry without a further amendment of the Table. The Table does not define the individual services; their scope comes from the licences and permissions of the Department, which are outside the Rules.

Serial number 14.2: the condition

As substituted in 2021, the condition reads in substance: the licensing, security and any other terms and conditions as notified by the Department of Telecommunications from time to time shall be observed by the licensee or entities providing services as referred to in serial number 14.1, as well as investors.

Three points on the words:

• Three kinds of terms. Licensing terms, security terms and "any other terms and conditions". The earlier text spoke only of licensing and security conditions.
• Who must observe them. The licensee, the entities providing the services listed in serial number 14.1, and the investors themselves.
• From time to time. The terms are those notified by the Department as they stand when the question arises.

The Table names these terms and does not set them out.

What "Automatic" does and does not mean here

Paragraph 3(a)(i) of Schedule I defines the automatic route as one that does not require the prior approval of the Reserve Bank or the Central Government; see automatic route and Government route. Three things still apply to a telecom investment:

• Rule 6(a). As substituted by S.O. 2174(E) dated 1 May 2026, it requires an entity or citizen of a country sharing a land border with India, or an investment beneficially owned from such a country, to invest only under the Government route, whatever the Table shows. See who may invest and the land-border countries.
• Serial number 14.2. The Department's licensing, security and other terms bind the investor directly.
• Paragraph 3(b). Foreign investment is subject to applicable laws or regulations, security and other conditionalities, and the onus of compliance is on the company receiving the investment.

A worked example

Teleris Networks BV, a foreign company from a country that does not share a land border with India, sets up Teleris Infra India Private Limited to provide dark fibre, duct space and towers as an Infrastructure Provider Category-I. Serial number 14.1 covers that activity. Teleris may hold all the shares, and the route is automatic. Both the Indian company and Teleris must observe the licensing, security and other terms the Department of Telecommunications notifies.

Teleris also buys 60% of Sampark Broadband Private Limited, which holds an ISP licence. Before October 2021 the part above 49% would have been on the Government route; after S.O. 4242(E) the route cell reads "Automatic".

A second investor, an entity incorporated in a country that shares a land border with India, wants 10% of Sampark. Rule 6(a) sends that investment to the Government route.

Need help bringing foreign capital into a telecom company?

The route is automatic, but the investor's country and the Department's terms still have to be checked. Our Indian subsidiary team handles incorporation, the allotment and the foreign investment reporting for telecom ventures.

Key takeaways

• Telecom services: cap hundred per cent; entry route "Automatic".
• The route cell and the list of services were substituted by S.O. 4242(E) dated 12 October 2021; the cap column is as notified in 2019.
• Other Service Providers, and any other services the Department of Telecommunications permits, are within the entry.
• Licensees, service entities and investors must observe the Department's licensing, security and other terms.
• Rule 6(a) still sends land-border investors to the Government route.

Read next

• Serial numbers 12 and 13 of the Table: space sector and private security agencies
• Serial numbers 15 to 15.2 of the Table: wholesale trading and e-commerce
• Schedule I paragraph 3(b): sectoral caps, investing companies and joint audit
• How to set up a foreign subsidiary in India

Disclaimer: Based on the Gazette text of the instrument this article names, as notified and as amended by the notifications named in the article (for the Foreign Exchange Management (Non-debt Instruments) Rules, 2019 the latest amendment consulted is S.O. 4870(E) dated 2 September 2026), as consulted on 2 October 2026. There is no official consolidated text; the provisions were read with each amendment applied. Sectoral caps, entry routes, conditions, forms and time limits change by notification, press note and circular; later changes should be checked on the Gazette, DPIIT and Reserve Bank sites. This article is general information, not legal advice; check the official text before acting.