Changes have been notified by the Department of Industrial Policy and Promotion (DIPP) with regard to the foreign direct investment policy for defence in India which was approved by the Government earlier. The limit for foreign direct investment has been raised from 26% to 49%. At the same time government approval over and above this increased percentage shall be mandatory. Further, it is a composite limit and shall include FDI, FII, Qualified foreign investors, NRI's, Foreign venture capitalist. Any proposals for over and above Rs. 1200 crore and beyond the limit of 49% would require the approval of Cabinet Committee of Economic Affairs (CCEA). The objective of the Indian Government behind this development is to help and encourage the domestic manufacturing of the defence goods which are imported by the Country as of now. This will be a boon for the domestic manufacturing and will further reduce the imports which in turn will prove very beneficial for the Country's economy and would also lead to its growth.
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