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New FDI Policy in Defence Sector approved

  • IASbaba
  • September 21, 2020
  • 0
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New FDI Policy in Defence Sector approved

Part of: GS Prelims and GS-III – Defence; FDI

In news

  • 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.

Key takeaways

  • 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.

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