Foreign Investment in Defence Sector up to 49% Under Automatic Route
As per extant FDI policy in the Defence Sector, foreign investment up to 49% is permitted under Government approval route. Foreign investment above 49% is also permitted, subject to approval of Cabinet Committee on Security (CCS) on case to case basis, wherever the investment is likely to result in access to modern and ‘stateof-art’ technology in the country. Portfolio investment and investment by FVCIs is restricted to brought in the FDI policy on this sector:
i. 24% only. In this regard, the following changes have inter-alia been Foreign investment up to 49% will be under automatic route.
ii. Portfolio investment and investment by FVCIs will be allowed up to permitted automatic route level of 49%.
iii. Proposals for foreign investment in excess of 49% will be considered by Foreign
Investment Promotion Board (FIPB).
iv. In case of infusion of fresh foreign investment within the permitted automatic route
level, resulting in change in the ownership pattern or transfer of stake by existing investor to new foreign investor, Government approval will be required.