Govt notifies increase in FDI cap to 49 pc in defence sector

Tags: News
The government today notified increase in foreign direct investment (FDI) limit to 49 per cent through approval route in the defence sector.

The move is aimed at boosting domestic industry of the country which imports up to 70 per cent of its military hardware.

FDI ceiling in the sensitive defence sector has been hiked from current 26 per cent, with the condition that the company seeking permission of the government for FDI up to 49 per cent should be an Indian company owned and controlled by Indians.

Further, foreign direct investment proposals above 49 per cent will have to seek the approval of the Cabinet Committee on Security on "case to case basis, wherever it is likely to result in access to modern and state of the art technology in the country," according to the press note of the Department of Industrial Policy and Promotion (DIPP).

It also said that FDI limit of 49 per cent is composite and includes all kinds of foreign investments - FDI, FIIs, FPIs, NRIs, foreign venture capital investors (FVCIs) and qualified foreign investors (QFIs).

However, portfolio investments by FPIs/FIIs/NRIs/QFIs and investments by FVCIs together will not exceed 24 per cent of the total equity of the investee/joint venture company.

"Portfolio investments will be under automatic route," it added.

EDITORIAL OF THE DAY

  • India must move one level higher and be the exporter of electronics to the world

    INDIA hopes to achieve net zero-import balance in the electronics industry over the next three years.

FC NEWSLETTER

Stay informed on our latest news!

TODAY'S COLUMNS

Sandeep Bamzai

Cut & Thrust:The mother of all battles

Gassed out after the interminable interplay of the Yadavs in ...

BK Chaturvedi

The politics of election

Elections in five states have been announced by the election ...

Rajgopal Nidamboor

Of life’s essentiality and synchrony

It is no big deal to think of psychology as ...