An Indian government committee has approved Vodafone's planned 101.41 billion rupee ($1.63 billion) buyout of the minority shareholders in its Indian subsidiary.
The Cabinet Committee on Economic Affairs has signed off on the acquisition, the Financial Expressreported.
Vodafone will now use an indirect subsidiary to buy out the 35.62% of Vodafone India it does not currently own, becoming the first international operator to take advantage of the nation's recently relaxed restrictions on foreign ownership in the telecom sector.
Vodafone India is the nation's second largest telecom company by subscribers, with around 160.4 million mobile customers.
The unit's performance was a key factor in Vodafone Group this week reporting a smaller than expected decline in service revenue for its fiscal third quarter. Vodafone reported a 4.8% drop in service revenue to £9.8 billion ($15.99 billion), with Indian revenue up 13% to £937 million.
Vodafone India will meanwhile fight its latest tax battle with Indian tax officials later this month, after the Bombay High Court asked the Income Tax Appellate Tribunal (ITAT) to expedite hearings.
The tribunal has been asked to hear the case daily starting on February 21 – a start date one month earlier than originally scheduled – Press Trust of Indiareported.
This latest tax case revolves around a $37 million tax demand related to Vodafone India's sale of its BPO unit to a foreign entity in 2008. Vodafone has challenged the demand through the tribunal.