Categories: Business

DPIT to approach government for 74 percent FDI in defense through automatic route

Photo: FILE / PTI

FDI in Defense Sector

new Delhi. The Department for Promotion of Industry and Internal Trade (DPIIT) will soon approach the Union Cabinet for approval of up to 74 percent foreign direct investment (FDI) in the defense manufacturing sector through the automatic route. The objective of this initiative is to attract foreign companies to the region. Sources said that the DPIIT has discussed the matter with the Ministry of Defense. In May, Finance Minister Nirmala Sitharaman announced a Rs 20 lakh crore package to give relief to the economy affected by the Corona virus crisis, allowing automatic route FDI up to 74 percent in the defense manufacturing sector. Under the current FDI policy, 100 percent foreign investment is allowed in the defense industry. It requires 49 percent automatic route whereas government approval is required.

In July 2018, the government approved FDI in the defense sector by liberalizing FDI by up to 49 percent on the automatic route. According to DPIIT data, the country's defense industry received FDI of $ 95.2 lakh (Rs 56.88 crore) during April 2000 to March 2020. The total FDI in the country increased by 18 percent to $ 73.45 billion in 2019-20.

This post was published on July 13, 2020 10:41 pm

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