Vivek Raghuvanshi
NEW DELHI — The Indian Ministry of Defence (MoD) is considering changes to its policy that limits how much overseas defense companies can invest in a joint venture with an Indian company.
Indian law allows automatic foreign direct investment (FDI) but with an upper limit of 49 percent. The limit can be increased to 100 percent, but only on a case-by-case basis. However, no clearance has been given to any overseas foreign company beyond 49 percent as the procedures are regarded as cumbersome and confusing.
"Overseas defense companies want to invest beyond 49 percent but there is no set procedure so far on giving approval for FDI investments beyond 49 percent," an MoD official said.
With the aim of speeding the clearances, the MoD is considering an internal note on the matter — in consultation with the domestic defense industry, which also seeks speedy clearance for FDI.
Indian Defence Minister Manohar Parrikar told Parliament early this month that only $0.16 million has been invested through the FDI route since 2014.
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