MoD not for increasing FDI cap in defence sector

New Delhi, Feb 5 (PTI) The Defence Ministry today said itwill stick to its stand of not increasing the FDI limit from26 to 49 per cent in defence sector even as a group ofministers is likely to give its final view on the issue soon.

"Final view on the issue is likely to be taken but as faras the Defence Ministry is considered, we will stick to ourstand," Defence Minister A K Antony told reporters here onthe sidelines of the C-130J induction ceremony.

The Defence Ministry has been opposing proposals movedby the Commerce Ministry to increase the FDI limit from thepresent 26 per cent to 49 per cent to attract more foreigninvestors in the country.

A "group of 2-3 Ministers" is considering the proposaland is likely to take a final view on the issue soon.

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.