New Delhi, May 31 (IANS) India will take a decision on raising the foreign direct investment (FDI) limit in defence production to 74 percent from the present 26 percent by September, an official said Monday.
The commerce and industry ministry hopes to get the defence ministry’s views on the FDI hike by July. The Department of Industrial Policy & Promotion (DIPP) released a paper May 17 suggesting the FDI cap in defence manufacturing be raised to attract established players and save foreign exchange.
‘Everything will be clear by September 2010 on FDI policy front as the government would have completed its next sectoral review, involving sectors such as defence, retail, telecom, agriculture etc… the proposals will acquire a shape of government policy after all stakeholders in the process have their consent in it,’ said DIPP Director Deepak Narain.
‘Till now the consultation paper remains in the proposal form of DIPP and reflects no government policy decision as regards to increased equity of overseas business in defence and retail,’ Narain said at an event organised by industry lobby Assocham here.
The DIPP paper says the present FDI cap of 26 percent discourages original equipment manufacturers (OEMs) from bringing in proprietary technology, resulting in India ‘not being able to access the latest high-end technologies available’.
It also lists a series of benefits that would accrue when the FDI cap is raised.
Defence Minister A.K. Antony reiterated, soon after the consultation paper was released, that the FDI cap would remain at 26 percent but could be raised to 49 percent on a case-by-case basis.