Defence gets mere Rs 36 cr FDI in 18 yrs

Tribune News Service

New Delhi, July 18

In what reflects a ‘lack of interest’ by foreign companies in the Indian defence manufacturing sector, there has been a mere $5.13 million (Rs 36 crore) foreign direct investment (FDI) in the past 18 years.

As per the Ministry of Defence (MoD) figures submitted in Parliament on Wednesday, so far 41 FDI proposals or joint ventures have been approved to manufacture various defence equipment, both in public and private sectors.

FDI amounting to $5.13 million has been received in the defence industry sector from April 2000 to March 2018. These figures are a mere shadow of the overall FDI inflow into the country, which was $61.96 billion (Rs 4.24 lakh crore) in 2017-18 alone.

In March this year, Parliament was informed that only Rs 1.17 crore FDI was received between April 2014 and December 2017.

Touting FDI in defence as a major shift in policy, the (MoD) in 2016 had okayed up to 49 per cent stake for foreign companies partnering Indian companies.

As per existing FDI policy, in defence sector, foreign investment up to 49 per cent is permitted under automatic route. Foreign investment beyond 49 per cent (up to 100 per cent) is permitted through government approval in cases resulting in access to modern technology in the country or for other reasons to be recorded. FDI limit for defence sector has also been made applicable to Manufacturing of Small Arms and Ammunitions covered under Arms Act 1959.

Low investment despite policy shift

Rs 4.24 lakh cr Overall FDI inflow in 2017-18 alone

Rs 36 cr FDI in defence 

since 2000

41FDI proposals approved 

so far

49% FDI permitted under 

automatic route

100%FDI allowed through govt approval in cases resulting in access to modern technology