It was communicated to DoT that they are the competent authority to deal with the proposal, he said.
"We have sent back (the proposal) immediately. We have stated that it is for you to decide," he said, adding that tax liabilities do not constitute additional condition.
Idea's proposal assumes significance against the backdrop of pending merger with Vodafone India to form the country's largest telecom operator.
The FDI policy allows an overseas firm to buy up to 49 per cent stake in an Indian telecom company under automatic approval route. But the government approval is required for stake above 49 per cent.
Idea and Vodafone announced last year that they would combine their operations to create the country's largest telecom operator worth over $23 billion, with a 35 per cent market share.
Foreign share holding in Idea as on March 31, 2018, stood at around 34 per cent, including 7.49 per cent in promoter group and the rest as public shareholders. British telecom multinational Vodafone Group plc is a majority shareholder in Vodafone India.
Foreign shareholding in the combined Idea-Vodafone entity, thus, would breach the automatic approval limit of 49 per cent.
According to the Idea-Vodafone merger announcement, Vodafone would own 45.1 per cent of the combined company after transferring a 4.9 per cent stake to Aditya Birla Group for Rs 3,900 crore in cash, concurrent with completion of the merger.
As the DoT had added a condition in the proposal, the matter was sent to the DIPP.
After the abolition of foreign investment promotion board (FIPB), respective departments and ministries of 11 sectors, including telecom and print media, are the competent authorities for approval of FDI proposals unless they want to add some condition or reject the proposal. In such circumstances, they have to seek the views to the DIPP.
The merged Idea-Vodafone entity will have highest subscriber base of 410 million accounting for over 35 per cent market share and second largest spectrum holding of 1,850 megahertz in the country.
The debt of resultant entity is expected to be around 1.1 trillion as per debt situation of Idea and Vodafone India at the end of September 2017.
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