Govt Allows Up To 74 Per Cent FDI In Defence Sector Through Automatic Route

The Centre has enhanced the FDI limit for defence sector by allowing up to 74 per cent capital via automatic route.

Government approval will be required for in-take of foreign capital beyond 74 per cent with a stipulation that the foreign capital "is likely to result in access to modern technology or for other reasons to be recorded".

According to the Department for Promotion of Industry and Internal Trade (DPIIT), the decision will take effect from the date of FEMA (Foreign Exchange Mana gement Act) notification.

"FDI up to 74 per cent under automatic route shall be permitted for companies seeking new industrial licenses," DPIIT said in a press note.

"Proposals for raising FDI beyond 49 per cent from such companies will require government approval."

The development assumes significance as the Centre is trying to boost domestic defence sector manufacturing.

At present, India is considered to be one of the largest weapons importers in the world.

(This story has been published from a wire agency feed without modifications to the text. Only the headline has been changed.)