COMMERCE and industry minister Anand Sharma on Wednesday pitched for raising the limit of foreign direct investment (FDI) in the defence sector to at least 49 per cent to help India become one of the major defence producers of the world.
I am in favour of raising FDI in defence to at least 49 per cent,if not 74 per cent,and this is what my department has recommended, Sharma told reporters on the sidelines of the CII annual general meeting here.
Currently,FDI up to 26 per cent is allowed in the defence sector and the department of industrial policy and promotions (DIPP) proposal to raise it to 74 per cent has been met with stiff opposition from the ministry of defence on security grounds. India imports nearly 70 per cent of its weapons and equipment.
Stressing the need to have partnership between the government and industry on the issue,Sharma said,I assume we have the support of Indian producers. FDI of 26 per cent is definitely low. I recommended and will continue to strive for higher FDI in defence.
A senior government official said that the consultation with the defence ministry is on and the two ministries are trying to reach a common ground on the issue.
Meanwhile,the minister added that the consolidated circular on FDI policy is likely to come by the end of the week. The DIPP issues a consolidated circular on FDI every year to address the concerns of foreign investors and bring clarity in the policy.
Emphasising that the government is committed to improve the investment climate,the minister said that it will come out with a pragmatic foreign trade policy for exporters on April 18.
The government in December,2012,had announced incentives for exporters that include extension of 2 per cent interest subsidy for an additional year ending March,2014. I have had very detailed discussions with the finance minister as he had announced in the Budget about the foreign trade policy and exports-related matters and support to the industry,and the two ministries are in talks, he said.