Investment in Defence Through FDI Route

In May, 2001, the Defence Industry sector, which was hitherto reserved for the public sector, was opened up to 100% for Indian private sector participation, with Foreign Direct Investment (FDI) up to 26% both subject to licensing.  Further, Department for Promotion of Industry and Internal Trade, Ministry of Commerce & Industry vide Press Note No.5 (2016 Series)’, has allowed FDI under automatic route upto 49% and above 49% through government route wherever it is likely to result in access to modern technology or for other reasons to be recorded.  Further, FDI in defence industry sector is subject to industrial license under Industries (Development & Regulation) Act, 1951 and manufacturing of small arms and ammunition under the Arms Act, 1959.  As per the data furnished by 37 companies in Defence and Aerospace sector, so far (i.e. till June, 2020).  FDI inflows of over Rs 2883 crores have been reported in Defence and Aerospace sectors through automatic route.  Further, FDI inflows of over Rs.1849 crores have been reported in Defence and Aerospace sectors after 2014 through automatic route.

This information was given by Raksha Rajya Mantri Shri Shripad Naik in a written reply to Dr.Sasmit Patra in Rajya Sabha today.