FIPB Puts First 100% FDI Pro­posal in De­fence on Hold

The Economic Times - - Companies: Pursuit Of Profit -

13k-cr FDI pro­pos­als cleared; govt seeks time to ex­am­ine de­fence plan New Delhi: The For­eign In­vest­ment Pro­mo­tion Board has cleared pro­pos­als worth more than .₹ 13,000 crore, in­clud­ing one by Axis Bank to in­crease over­seas share­hold­ing, en­tail­ing an in­flow of .₹ 12,900 crore.

The first pro­posal for 100% FDI in de­fence to be made un­der the new pol­icy, from DCNS, a global leader in sub­ma­rine sys­tems, was de­ferred by the board, as the min­istries of de­fence and home af­fairs sought more time to ex­am­ine it.

In­dia changed FDI rules for the de­fence sec­tor in Novem­ber, al­low­ing up to 49% un­der the au­to­matic route. Pro­pos­als with higher in­vest­ment lev­els need to be ap­proved on a case-by-case ba­sis by the FIPB in con­sul­ta­tion with min­istries, af­ter which they are sent to the Cabi­net Com­mit­tee on Eco­nomic Af­fairs for con­sid­er­a­tion.

Axis Bank’s plan to raise for­eign share­hold­ing to 74% from 62% now will go to the CCEA as the for­eign di­rect in­vest­ment in­flow pro­posed is .₹ 12,900 crore. The For­eign In­vest­ment Pro­mo­tion Board can only clear pro­pos­als of up to .₹ 5,000 crore. “Axis Bank’s pro­posal has been cleared,” said a gov­ern­ment of­fi­cial privy to the de­lib­er­a­tions of the FIPB meet­ing. Pro­pos­als by Aurobindo Pharma, Wock­hardt and Fu­nai In­dia also re­ceived the board’s nod. The For­eign In­vest­ment Pro­mo­tion Board re­jected one of the 14 pro­pos­als it took up on Fri­day.

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