The Centre will need to amend the Private Security Agencies Regulation (PSAR) Act (2005) to help in implement its decision to allow foreign direct investment of up to 74 per cent in private security agencies, an official of a trade body said.
“Given that investment in the private security sector is capped at 49 per cent as result of the provisions under the PSAR Act (2005), the Government’s decision to allow majority foreign ownership in private security industry up to 74 per cent would require amendments to the PSAR Act (2005),” Rituraj Sinha, Co- Chair, FICCI Committee on Private Security Industry said.
“The private security industry welcomes the announcement towards relaxation of foreign investment in the sector. Allowing up to 49 percent FDI under the automatic route shall add to ease of doing business significantly and is expected to expedite the investment process in the sector substantially,” Mr. Sinha said.
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However, he added that the private security industry, which has a huge employment generation potential, shall soon be engaging with the Department of Industrial Policy and Promotionand the Home Ministry to clarify the Centre’s decision.