Foreign direct investment (FDI) in defence has received much attention in the run up to the budget announcements. The announcement to increase FDI in defence from 26% to 49% may not be attractive enough for foreign players, who were hoping for a minimum 51%. While the enhancement of FDI limits may enable the local defence industry to collaborate with foreign weapons manufacturers, the Indian government’s position on technology transfer and local hiring will be most important. The new government needs to take a firm position on these issues, which will equip India with the necessary capabilities for indigenous defence production.
Is Arun Jaitley’s 49% FDI in defence sector enough for India’s security?
Sameer Patil, Associate Fellow, National Security, Gateway House, speaks about how the announcement to increase FDI in defence from 26% to 49% may not be attractive enough for foreign players, who were hoping for a minimum 51%