India Has Approved 33 Proposals for Foreign Investment in Defence

The Indian Government has so far issued 251 Letters of Intents and industrial licences covering 150 companies till January 2015 for manufacture of defence equipment to public, private companies.

49 license companies covering 72 licenses have so far reported commencement of production, defence minister Manohar Parrikar told Indian parliament today

The following major steps have been taken for domestic manufacture of defence equipments:

FDI Policy in Defence sector has been reviewed and as per the new policy, composite foreign investment up to 49% has been allowed through FIPB route and beyond 49% with the approval of Cabinet Committee on Security (CCS) wherever it is likely to result in access to modern and ‘State-of-the-art’ technology in the country.

Defence Products List for the purpose of industrial licensing has been revised and in the revised list most of the components, parts and raw materials have been taken out from the purview of the industrial licensing.

Further, the initial validity of industrial licensing has been increased to three years and, thereafter, two time extension of 02 years each may be granted to a company by the Administrative Ministry.

Government has accorded priority to ‘Buy (Indian)’, ‘Buy & Make (Indian)’ and ‘Make’ categories of acquisition over ‘Buy (Global)’ category to promote domestic manufacturing.

So far 33 FDI proposals, Joint Ventures have been approved in Defence sector for manufacture of various defence equipments, both in public and private sector.