India’s FDI in defence increased to 49%

Indian Government and Defence Ministry has increased the Foreign Direct Investment (FDI) limit up to 49% from the previous 26%. The current FDI in Defence sector is also subject to the condition that the management of Applicant Company / partnership should be in Indian hands with majority representation on the Board as well as Chief Executives of the company / partnership firm being resident Indians. As per another condition of the current FDI Policy, adequate safety and security procedures would need to be put in place by the licensee once the licence is granted and the production commences. The Government has also finalized and put in public domain a Security Manual for private sector defence manufacturing units. The Manual prescribes guidelines for physical, documents, IT and other security measures to be put in place by such units.


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