New FDI Policy in Defence Sector approved
Part of: GS Prelims and GS-III – Defence; FDI
- Recently, the Union Cabinet approved a new Foreign Direct Investment (FDI) policy in the defence sector.
- It allows the FDI through automatic approval to be increased from 49% to 74%.
- However, the new policy has a ‘National Security’ clause as a condition which has been proposed by the Ministry of Commerce and Industry.
- Through more liberalised FDI policy the government is seeking to attract foreign players to set up manufacturing units in India.
- It has been focusing on the defence sector to act as an engine for boosting manufacturing.
- It is aiming to achieve a turnover of Rs 1.75 lakh crore, including exports worth Rs 35,000 crore, by 2025.
Do you know?
- The government has brought a draft Defence Production and Export Promotion Policy 2020 (DPEPP 2020).
- The government has also brought a negative imports list for defence equipment.
- A dedicated budget for capital acquisition from the domestic industry is also prepared.
- The government has inaugurated two defence industrial corridors to boost the flagship ‘Make in India’ programme.