The government plans a comprehensive law to streamline assessment of security threats arising from business transactions and enable its agencies to decide on the cases of foreign direct investment in sensitive areas.
"The Bill (National Security Exception Act) is in formative stage," Commerce and Industry Minister Kamal Nath said after inaugurating Marketing Summit organised by the Confederation of Indian Industry.
"There are some concerns on FDI (in some sectors and from some sensitive countries). In cases like these government steps in," he said.
Apart from FDI, the Bill would also govern participation of foreign firms in global tenders floated by public sector companies and government departments.
Nath said such law would have no impact on FDI. "Other countries too have such arrangements to check FDI from undesirable countries and sensitive sectors... the proposed law would not send any wrong signals," he added.
The minister was of the opinion that if the proposed Bill becomes a law it would not be applied from retrospective effect.
The first draft of the Bill has been finalised by the National Security Council Secretariat.
At present, there is no written procedure or law to determine if a particular proposal of FDI is undecidable. All such cases are decided through consultations between government departments after obtaining inputs from various security and intelligence agencies.
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