The guidelines which run into 13 pages — three months ago, a Committee of Secretaries went through the NSCS policy paper — make it clear that while India needs “uninterrupted flow of FDI”, there should be a security vetting mechanism guided by two principles: “genuine investors should not be subjected to harassment and second, investors whose activities may be inimical to national interests should not be allowed to operate.”

Incidentally, the guidelines state that the Ministry of Home Affairs (MHA) and not the Ministry of Finance must be the nodal agency to ensure that foreign entities “do not indulge in any anti-national activity”. The MHA will be assisted by intelligence agencies.

The NSCS wants the MHA to invoke the National Security Exception Act only when existing laws like FEMA and Companies Act do not address threats to national security from FDI.

In addition, a Committee of Secretaries on Foreign Investment (COSFI) will be constituted to take a final view on the MHA recommendations. The COSFI will function under the Cabinet Secretary and comprise Secretaries of Home, Defence, Foreign and Finance.

“Action to ban operations should be resorted to only after having reasonable grounds to do so. Where necessary, a continuous watch may be kept over suspect entities,” state the guidelines.