Up to 74% FDI in defence through automatic route
Killing two birds with one stone – promoting local production of arms and trimming import dependence – the Department for Promotion of Industry and Internal Trade (DPIIT) plans to hike vestment (FDI) in defence in the automatic route from 49% to 74%.
Data released by Stockholm International Peace Research Institute (SIPRI) last year showed that India was the largest importer of arms from 2012 to 2016. Currently, any foreign investor proposing to set up a manufacturing base here requires a licence (from both the defence ministry and DPIIT) and a procurement order from the government. “For the ease of doing business, the FDI approval process can also be subsumed in the licensing process. Another layer for a separate FDI approval process can be done away with,” suggested Akash Gupt, partner at PwC.