<p>Within days of coming to power, the Narendra Modi-led government has begun consultations on allowing 100 per cent foreign direct investment (FDI) in defence, on a case-to-case basis, with the underlying purpose of expanding the defence manufacturing base in India.<br /><br /></p>.<p>The Commerce Ministry on Thursday circulated a 15-page Cabinet note suggesting a road map to increase the FDI in defence from the existing 26 per cent to 49 per cent, and even to 100 per cent in some cases after obtaining necessary approvals.<br /><br />According to the note, as reported by a news agency, portfolio investors, including foreign institutional investors would be permitted to invest only up to 49 per cent. A foreign firm can even take over a domestic entity if it brings in state-of-the art technology.<br /><br />If companies engaged in manufacturing state-of-the art equipment and machinery or those undertaking modernisation projects want to set up a production unit here, there will be no cap (100 per cent FDI) for them.<br /><br />While Defence Minister Arun Jaitley and Commerce Minister Nirmala Sitharaman did not speak on the contentious subject after it was reported in a section of the media, Information and Broadcasting Minister Prakash Javadekar said raising the FDI limit in the defence sector would help India create jobs and become self-reliant in the military arena.</p>
<p>Within days of coming to power, the Narendra Modi-led government has begun consultations on allowing 100 per cent foreign direct investment (FDI) in defence, on a case-to-case basis, with the underlying purpose of expanding the defence manufacturing base in India.<br /><br /></p>.<p>The Commerce Ministry on Thursday circulated a 15-page Cabinet note suggesting a road map to increase the FDI in defence from the existing 26 per cent to 49 per cent, and even to 100 per cent in some cases after obtaining necessary approvals.<br /><br />According to the note, as reported by a news agency, portfolio investors, including foreign institutional investors would be permitted to invest only up to 49 per cent. A foreign firm can even take over a domestic entity if it brings in state-of-the art technology.<br /><br />If companies engaged in manufacturing state-of-the art equipment and machinery or those undertaking modernisation projects want to set up a production unit here, there will be no cap (100 per cent FDI) for them.<br /><br />While Defence Minister Arun Jaitley and Commerce Minister Nirmala Sitharaman did not speak on the contentious subject after it was reported in a section of the media, Information and Broadcasting Minister Prakash Javadekar said raising the FDI limit in the defence sector would help India create jobs and become self-reliant in the military arena.</p>
