Government's decision on FDI in defence to enhance self-reliance in sector: Goyal

The government has permitted 74 per cent foreign direct investment (FDI) under automatic route in the sector with certain conditions.

Published: 18th September 2020 01:59 PM  |   Last Updated: 18th September 2020 01:59 PM   |  A+A-

Union Railways and Commerce Minster Piyush Goyal

Union Minster Piyush Goyal (File photo| Shekhar Yadav, EPS)


NEW DELHI: The government's decision to ease FDI norms in the defence sector will push self-reliance in production and keep national interests and security paramount, Commerce and Industry Minister Piyush Goyal said on Friday.

He said that foreign investments in the defence sector would be subject to scrutiny on grounds of national security.

The government has permitted 74 per cent foreign direct investment (FDI) under automatic route in the sector with certain conditions.

"Now, FDI is allowed up to 74 per cent through automatic route and beyond 74 per cent to be permitted through government (approval) route. This will enhance ease of doing business and contribute to growth of investment, income and employment. In line with our collective vision of Aatmanirbhar Bharat, amendments will enhance self-reliance in defence production, while keeping national interests and security paramount," he said in a tweet.

The permit for up to 74 per cent FDI in the defence manufacturing through the automatic route was announced by Finance Minister Nirmala Sitharaman in May while announcing the fourth tranche of the Rs 20 lakh crore stimulus package for the coronavirus-hit economy.

In July 2018, the government had relaxed foreign direct investment norms in the defence sector by allowing up to 49 per cent FDI under the automatic route.

The move was aimed at boosting domestic industry as India imports about 70 per cent of its military hardware.

According to the Department for Promotion of Industry and Internal Trade data, defence industries have received FDI equity inflows of USD 9.52 million (Rs 56.88 crore) during April 2000 and March 2020.

Under the government route, foreign investors have to take prior approval of the respective ministry/department, while in the automatic route, the investor just has to inform the Reserve Bank of India after the investment is made.


Disclaimer : We respect your thoughts and views! But we need to be judicious while moderating your comments. All the comments will be moderated by the editorial. Abstain from posting comments that are obscene, defamatory or inflammatory, and do not indulge in personal attacks. Try to avoid outside hyperlinks inside the comment. Help us delete comments that do not follow these guidelines.

The views expressed in comments published on are those of the comment writers alone. They do not represent the views or opinions of or its staff, nor do they represent the views or opinions of The New Indian Express Group, or any entity of, or affiliated with, The New Indian Express Group. reserves the right to take any or all comments down at any time.

flipboard facebook twitter whatsapp