Ministry of Defence
azadi ka amrit mahotsav

FDI in Defence Sector

Posted On: 25 JUL 2022 3:22PM by PIB Delhi

The Government vide Press Note No. 4(2020 Series) dated 17.09.2020, has liberalised and allowed FDI under automatic route up to 74% and up to 100% through Government route wherever it is likely to result in access to modern technology. Since the notification of revised FDI policy, the total FDI inflow reported till May, 2022 is approximately Rs. 494 Crores. The Department of Defence Production (DDP) has brought in number of Policy reforms for attracting investment:

  • Higher multipliers assigned in Offset Policy to attract investment and Transfer of Technology for Defence manufacturing.
  • Specific consultations are done regularly with Foreign Original Equipment Manufacturers (FOEMs).
  • Two Defence Corridors have been established; one in Tamil Nadu and another in Uttar Pradesh which provide Plug & Play support to the industries including FOEMs in the Corridor. Under the Aerospace & Defence Policy notified by the two State Governments, Customized incentive packages are provided to investors based on investment, employment and project location which may include GST based refunds on sales, Stamp duty concessions on land allotment, Electricity Tax exemption, Capital subsidy and Training subsidy for training workers.
  • Webinars are conducted with Friendly Foreign Countries (FFCs) under the aegis of DDP, Ministry of Defence (MoD) through Indian Missions abroad and Industry Associations with active participation from Indian Defence Industries. Webinars have been conducted with 27 FFCs till date.
  • Defence Investor Cell has been created to provide all necessary information including addressing queries related to investment opportunities, procedures and regulatory requirements for investment in the sector. 1,445 queries have been addressed by the Cell till date.

This information was given by Raksha Rajya Mantri Shri Ajay Bhatt in a written reply to Shri K R Suresh Reddy in Rajya Sabha today.



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