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Government to hike FDI in defence manufacturing to 74 per cent; ban certain imports

Finance Minister Nirmala Sitharaman said that the government will notify a list of weapons/platforms banned for imports. Such items can only be purchased from India.

By: Express Web Desk | New Delhi | Published: May 16, 2020 6:53:46 pm
Union Finance Minister Nirmala Sitharaman addressing a press conference in New Delhi.

Union Finance Minister Nirmala Sitharaman on Saturday announced that the FDI limit in defence manufacturing under automatic route will be raised to 74 per cent from the current 49 per cent. She also said that the government will notify a list of weapons/platforms banned for imports, adding that such items can only be purchased from India.

 

The minister said that every year this list will be increased after consultation with the Department of Military Affairs. Addressing her fourth press conference in as many days for presenting the fourth tranche of the Rs 20 lakh crore economic package, Sitharaman said that there will be indigenisation of some imported spares.

Follow Nirmala Sitharaman’s 4th Press Conference Live Updates

She also said that a separate budget provisioning will be done for domestic capital procurement. This she said will reduce the huge defence import bill.

Separately, the Ordnance Factory Boards will be corporatised for better management and eventually get listed on the stock market, the minister said adding that corporatisation is not privatisation.

 

The government will also begin time-bound defence procurement and faster decision making by setting up a Project Management Unit (PMU) to support contract management. This will ensure the realistic setting of General Staff Qualitative Requirements of weapons/platforms and overhaul trial and testing procedures.

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