A clutch of key industrial sectors face government scrutiny, especially for data security, under a planned security policy that is set to clamp restrictions on foreign direct investment (FDI) approvals in sensitive areas.
Among the issues examined will be the safety of releasing seismic data on hydrocarbons that can land in the hands of spies from unfriendly nations.
A new policy detailing security regulations for the flow of foreign investment in critical sectors including telecoms, real estate, petroleum refining, oil and gas exploration and production, power and defence production will be unveiled shortly.
The Law Ministry has already cleared the document which will soon be examined by a secretaries’ panel on FDI before being put up to the Cabinet, a senior government official told the Hindustan Times, asking not to be identified.
Investments by foreign entities in such areas need vetting and clearance from security angle and data should not be shared with foreign entities without prior clearance of the government of India, said a communication from the National Security Council (NSC) secretariat to various ministries.
The NSC, which is headed by Prime Minister Manmohan Singh, had on September 24 sought of details of the current FDI guidelines applicable in sensitive and critical sectors. Several ministries have responded, officials said.
The guidelines will form the core of a new security law.
The legislation will form the basis for conducting a security-related scrutiny even for areas and sectors where FDI is permitted through the automatic route.
“Petroleum and hydrocarbon is critical to the economy and social security,” the NSC letter said.
“Data based on seismic surveys and potential resources should not be revealed for strategic reasons—espionage.”