In the context of perceived threats, the challenge before the government is to come up with an FDI policy that is secure as well as investor-friendly.

The recently released discussion paper prepared by a committee of secretaries on the National Security Exception Bill which is yet to be tabled in the Parliament has stirred up a hornet's nest. The discussion paper on the Bill which is intended to provide a suitable mechanism to review and restrict Foreign Direct Investment (FDI) that might pose a threat to national security has come up with a proposal to examine FDI applications on a sector-wise rather than a country-wise basis to assess their threat perception to national security.

In other words instead of blacklisting countries and foreign investors the Indian Government may opt for a sectoral vetting of FDI applications which means FDI proposals to certain sectors considered `sensitive' by the government would invite special scrutiny. So far so good. But what has raised concern is the list of sensitive sectors for FDI or the `trigger' list which includes almost every sector that one can think of: Aviation Airports Seaports Telecommunications Internet Service Providers International Long Distance Telecom Services Petroleum Refining Gas Pipelines Hydrocarbon Exploration Shipping Roads Waterways Drugs and Pharmaceuticals Data Networks Electronic Hardware Data Processing Defense Industry and Metallurgy. This list is to be revised annually and FDI applications to any of these 18 sectors would be scrutinized by the Finance Ministry as well as the Home Ministry.

This list of sensitive sectors would complement the list of sensitive areas that includes border and insurgency-affected states such as Jammu & Kashmir North-Eastern states and Sikkim and territories close to the defense and nuclear establishments. FDI proposals in these states and locations and in the sensitive sectors would come under the scanner of Union Home Ministry and the intelligence agencies would go through the background of the investors with a fine-tooth comb.

The Analyst Magazine, Foreign Direct Investment, FDI, Aviation Airports, Seaports Telecommunications, American Intelligence Agencies, Transportation Industry, National Security Exception, Global Terrorism, Mergers and Acquisitions, Services Sectors, Global Stock Markets, Global Economy.