ASSOCHAM urges increase in FDI limit to 49 per cent; US Assistant Secretary of State for South and Central Asia urges rise in FDI cap in defence and insurance sectors; IAF Vice Chief also voices similar views
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    • The Associated Chambers of Commerce and Industry of India (ASSOCHAM) has reiterated its demand for enhancing FDI limit in defence production from the present 26 per cent to 49 per cent.1 In a statement, the industry representative observed that higher FDI limit would help India’s self-reliance in defence production to grow with “faster adoption of latest technology transfer.” Presently India imports most of its defence equipments (valued over $6 billion in 2008), although the government had set a target to produce indigenously 70 per cent of its requirements. ASSOCHAM stated that an increase in the FDI limit, along with the offset policy, would help Indian industry to develop its technological and manufacturing capabilities. It pointed out that private companies will be the main catalyst for increasing the country’s self-reliance capabilities.

    US Assistant Secretary of State for South and Central Asia, Robert Blake also urged New Delhi to “lift the cap on foreign equity in Indian defence firms, from 26 per cent to 49 per cent."2

    IAF Vice-Chief Air Marshal P.K. Barbora also stressed the need for higher FDI in defence industry. Speaking at a conference organised by the CII, Barbora urged the government to be "bold enough to invite Foreign Direct Investment (FDI), more so into defence use."3

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