Sources from CNBC-TV18 indicate that the government is contemplating raising the FDI limit for defense firms holding current licenses from 49% to 74% under the automatic route.
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The Department for Promotion of Industry and Internal Trade (DPIIT) is likely to soon revise the foreign direct investment (FDI) guidelines for defense firms with established capital, as reported by CNBC-TV18.
According to sources, the government plans to raise the FDI cap for defense firms holding existing licenses from 49% to 74% through the automatic route.
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Previously, the government modified FDI policies for defense firms acquiring new licenses, increasing the threshold from 49% to 74% under the automatic route. This forthcoming adjustment seeks to equalize the FDI regulations for both new and existing defense investments.
The FDI policy for the defense sector was relaxed in September 2020 to attract foreign investments, permitting up to 74% FDI via the automatic route, with limits above that requiring government approval.
