After RBI has approved Tata’s offer to buy back NTT DoCoMo stake in Tata Teleservices, it has been seen as India’s attempt to get more FDI from Japan.
“RBI realizes that in order to increase FDI (foreign direct investment) in India, while taking a look at the recent Indo-Japanese business ties, especially when related to FDI, the government may be able to make an exception to the extant provisions,” a senior government official said.
The central bank of India has granted the permission to Tata Group to pay Japan’s NTT DoCoMo Rs 58.045, which was previously decided and a share for NTT DoCoMo’s 26% stake in Tata Teleservices, even though it is much more than a self-determined ‘fair value’ price of Rs 23.34.
Japan’s largest mobile club by market share declared plans to turn over its loss-making Tata DoCoMo collaboration last year into a profitable one.
It needed to take use of an exit clause which was agreed upon when it had previously invested $2.7 billion to buy a 26% stake in Tata’s mobile subsidiary in 2008.
Although the RBI has not yet released a final ruling, people directly aware of the matter gave an affirmation to the ‘Financial Times’ that the central bank had contacted with the India’s finance ministry proposing a common rule change that would be flexible enough to allow agreements of the deal struck between Tata and NTT.
“DoCoMo submitted its request for arbitration to make sure that its rights be followed after Tata had failed to fulfil its promise, despite DoCoMo’s iterative negotiations with Tata considering the sale of its entire stake in Tata Teleservices,” NTT DoCoMo stated on January 5, explaining as to why it had moved the ICJ. The company is also claimed for moving the arbitration and after 90 business days, it gave to the Tatas to find a buyer laps.