Cabinet Will Consider Easing FDI In Defense Production - Nov 05, 2008

As a thrust for manufacturing and to lift investor’s confidence, government will consider relaxing rules for foreign direct investment in defense production, Commerce and Industry Minister Kamal Nath said on Nov 4. The Union Cabinet would take up the issue in the near future.

India can become a great manufacturer of defense items and will concentrate more on that, the minister told reporters on the sidelines of a meeting organized by business chambers with visiting Belgian King Albert II. He said the Cabinet would consider options to provide new thrust to the manufacturing sector. In addition, concentration on FDI would also be on the government agenda. At present, 26 per cent of FDI is permitted in the defence sector. Nath said despite troubles in the world economy, India continued to attract FDIs and the target of $35 billion for 2008-09 fiscal would be achieved. In September this year, FDI inflows went up by 259 per cent to $2.56 billion, against $713 million in the same month last year. For April-September period this year, the inflows went up to $17.21 billion from $7.25 billion of the corrosponding period a year ago, showing a rise of 137 per cent.