NEW DELHI (AP) – India announced on Saturday that global companies can now invest up to 74 per cent in the country’s defense manufacturing units, up from 49 per cent, without requiring any government approval.
Finance Minister Nirmala Sitharaman expressed hope that the new policy will attract foreign companies with high-end technologies to set up their manufacturing bases in India in collaboration with Indian companies.
Sitharaman’s announcement came as part of reforms Prime Minister Narendra Modi’s government is implementing to revive India’s economy, which has been shattered by the coronavirus pandemic.
She also told reporters that India will stop importing weapons that can be made in the country. “We will notify a list of weapons and platforms for ban on their imports and fix deadlines to do it,” she said, adding that this will improve self-reliance on defence manufacturing.
India introduced up to 49 per cent foreign direct investment in defence production in 2016 to attract modern technology in the country. That attracted over INR18.34 billion (USD244 million) until December last year, according to a government statement.
India issues defence industrial licences for making tanks, military aircraft, spacecraft and their parts, unmanned aerial vehicles, missiles for military purposes and warships.