Tuesday, July 22, 2014

'FDI in the Defence' not at the cost of DRDO;Jaitley

In May 2001, the Defence Industry sector, which was hitherto reserved for the public sector, was opened upto 100% for Indian private sector participation with FDI permissible upto 26%, both subject to licensing to enable private sector industry to participate in defence production within the country. However, wherever FDI beyond 26% is likely to result in access to modern and state-of-the-art technology in the country, decisions can be taken to allow higher FDI on a case-to-case basis with the approval of Cabinet Committee on Security. In the Union Budget 2014-15, it has been announced that the composite cap of foreign exchange is being raised to 49% with full Indian management and control through the FIPB route for defence sector. FDI is one of the route through which the domestic industry can strengthen its capabilities required to produce within the country different equipment / weapon systems / platforms required for defence.

As per the FDI Policy, the FDI in defence sector is through FIPB route and / or with approval of Government. Further, there are adequate provisions in Government’s Policy to ensure that the role of DRDO and India’s indigenous defence production programme are not compromised and / or minimized.

This information was given by Defence Minister Shri Arun Jaitley in a written reply to Shri Sukhendu Sekhar Roy in Rajya Sabha today.