The Indian government has restricted participation of companies from countries sharing a land border with India in the ongoing auction of coal mines for commercial extraction by the private sector.

The Coal Ministry has issued a corrigendum to the tender document issued for commercial coal mining, bringing out the fact that though 100 percent FDI, under the automatic route, is permitted in the new activity, investment proposals or bids from countries sharing a land border with India will only be done through the government route. This would mean such proposals will first be vetted by the government before any participation is allowed.

Also, proposals from companies, where the beneficial owner is situated in or is a citizen of any such country sharing a land border with India, will also have to go through the government route.

Further, the tender document has clarified that a citizen of Pakistan or an entity incorporated in Pakistan can invest, only under the government route, in sectors/activities other than defence, space, atomic energy and sectors/activities prohibited for foreign investment.

The Coal Ministry has issued the clarifications so that investors know about their eligibility before placing the bid and are not caught unawares later.

The government, through Press Note 3 of 2020 issued earlier, had put all investment from countries sharing a land border with India under the government approval route. The exercise was largely to check proliferation of Chinese companies in India's critical and sensitive sectors. Later, the border clashes between India and China in Ladakh created a ground where official agencies are looking at further measures to check investment and imports from the neighbouring country.

In all, 41 mines with a total geological coal reserve of 17 billion tonnes are on offer under the first phase of commercial coal mine auctions.  (IANS)