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Direct foreign investment in India's defence sector will require security clearances, the government said in a notification on Thursday.
The government had allowed foreign firms to directly invest up to 74% ownership in the defence sector from an earlier cap of 49%.
"Foreign Investments in the Defence Sector shall be subject to scrutiny on grounds of National Security and Government reserves the right to review any foreign investment in the Defence Sector that affects or may affect national security," the statement said.
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