New Delhi, September 17
The authorities has permitted international direct funding (FDI) of as much as 74 per cent beneath automated route within the defence sector with a view to attracting abroad buyers, in response to a press word issued by the DPIIT on Thursday.
However, international investments within the defence sector can be topic to scrutiny on the grounds of nationwide safety and the federal government reserves the correct to evaluation any international funding within the sector that impacts or could have an effect on nationwide safety, the Department for Promotion of Industry and Internal Trade (DPIIT) mentioned within the word.
As per the present FDI coverage, 100 per cent abroad investments are permitted within the defence trade — 49 per cent beneath the automated route, whereas past that authorities approval was required.
According to the Press Note 4 (2020 sequence): “FDI up to 74 per cent under automatic route shall be permitted for companies seeking new industrial licences.”
It additionally mentioned infusion of recent funding as much as 49 per cent, in an organization not looking for industrial licence or which already has authorities approval for FDI in defence, shall require “mandatory” submission of a declaration with the defence ministry in case change in fairness/shareholding sample or switch of stake by present investor to new international investor for FDI as much as 49 per cent, inside 30 days of such change.
Proposal for elevating FDI past 49 per cent from such firms would require authorities approval, it added.
“The decision will take effect from the date of FEMA (Foreign Exchange Management Act) notification,” it mentioned. — PTI