FDI in de­fence sec­tor up to 49 per cent un­der au­to­matic route

SP's MAI - - MILITARY | VIEWPOINT -

As per ex­tant FDI pol­icy in the de­fence sec­tor, for­eign in­vest­ment up to 49 per cent is per­mit­ted un­der gov­ern­ment ap­proval route. For­eign in­vest­ment above 49 per cent is also per­mit­ted, sub­ject to ap­proval of the Cab­i­net Com­mit­tee on Se­cu­rity (CCS) on case to case ba­sis, wher­ever the in­vest­ment is likely to re­sult in ac­cess to mod­ern and ‘state-of-the-art’ tech­nol­ogy in the coun­try. Port­fo­lio in­vest­ment and in­vest­ment by FVCIs is re­stricted to 24 per cent only. In this re­gard, the fol­low­ing changes have inter-alia been brought in the FDI pol­icy on this sec­tor: For­eign in­vest­ment up to 49 per cent will be un­der au­to­matic route. Port­fo­lio in­vest­ment and in­vest­ment by FVCIs will be al­lowed up to per­mit­ted au­to­matic route level of 49 per cent. Pro­pos­als for for­eign in­vest­ment in ex­cess of 49 per cent will be con­sid­ered by For­eign In­vest­ment Pro­mo­tion Board. 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.

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