<p><strong>By Vrishti Beniwal and Shruti Srivastava,</strong></p>.<p>India will give greater direct access to foreign investors in its defence sector as the nation seeks to lure more capital to an economy ravaged by the coronavirus pandemic.</p>.<p>Foreigners can now invest up to 74% in defence manufacturing under the automatic route, up from 49% previously, the trade ministry said in a statement Friday, as it implemented the plan announced by Finance Minister Nirmala Sitharaman in May.</p>.<p>While the country allows 100% FDI in defence, only 49% was permitted under the so-called automatic route thus far. The revision in the investment-cap comes amid Prime Minister Narendra Modi’s call to make India self-reliant at a time when the pandemic has disrupted supply chains globally.</p>.<p>Foreign investors’ interest in India’s defence sector was negligible even without the pandemic. defence industries attracted just $9.5 million in FDI over the last two decades for which data is available, whereas overall overseas investment flows into the country stood at about $50 billion in 2019 alone.</p>.<p>“This will enhance ease of doing business and contribute to growth of investment, income and employment,” Trade Minister Piyush Goyal said via Twitter. “Amendments will enhance self-reliance in defence production, while keeping national interests and security paramount.”</p>.<p>The changes would come into effect from the date of Foreign Exchange Management Act notification, it said.</p>
<p><strong>By Vrishti Beniwal and Shruti Srivastava,</strong></p>.<p>India will give greater direct access to foreign investors in its defence sector as the nation seeks to lure more capital to an economy ravaged by the coronavirus pandemic.</p>.<p>Foreigners can now invest up to 74% in defence manufacturing under the automatic route, up from 49% previously, the trade ministry said in a statement Friday, as it implemented the plan announced by Finance Minister Nirmala Sitharaman in May.</p>.<p>While the country allows 100% FDI in defence, only 49% was permitted under the so-called automatic route thus far. The revision in the investment-cap comes amid Prime Minister Narendra Modi’s call to make India self-reliant at a time when the pandemic has disrupted supply chains globally.</p>.<p>Foreign investors’ interest in India’s defence sector was negligible even without the pandemic. defence industries attracted just $9.5 million in FDI over the last two decades for which data is available, whereas overall overseas investment flows into the country stood at about $50 billion in 2019 alone.</p>.<p>“This will enhance ease of doing business and contribute to growth of investment, income and employment,” Trade Minister Piyush Goyal said via Twitter. “Amendments will enhance self-reliance in defence production, while keeping national interests and security paramount.”</p>.<p>The changes would come into effect from the date of Foreign Exchange Management Act notification, it said.</p>