New Delhi, Feb 1 (PTI) To attract foreign manufacturersto invest in India, a group of ministers is considering aproposal to raise Foreign Direct Investment limit in thedefence sector to 49 per cent from the current 26 per cent.
The Defence Ministry today said the proposal mooted bythe Commerce Ministry would also help the domestic industry togrow.
"The Ministry has proposed that the FDI limit should beincreased to 49 per cent. That proposal was received by ourMinistry and it is under discussion by a group of ministers,"Secretary Defence Production Rajkumar Singh said here.
"It is not a proper EGoM or a GoM. It is a group of onlytwo-three ministers," Singh said. He, however, declined toname the ministers.
Recently, the Department of Industrial Policy andPromotion had suggested FDI cap in defence sector to be raisedto 74 per cent saying 100 per cent overseas investment wouldbe desirable.
Industry chambers have also been demanding increase inforeign investment limit in the defence sector to 49 per centfor growth of the domestic industry as foreign companies werealso reluctant to invest without getting a significant degreeof control in the new entities.
India is the 10th largest defence spender in the worldand depends on over 70 per cent imports for its requirement.