CCS to decide FDI proposals beyond 26 percent in defence

New Delhi, July 16 (IANS) The government said Tuesday FDI in defence production beyond the existing 26 percent cap would be on a case-to-case basis after approval of the Cabinet Committee on Security (CCS) if state-of-the-art technology is involved.

Commerce Minister Anand Sharma told reporters here that existing sectoral cap for foreign direct investment (FDI) was 26 percent but 100 percent investment was permitted by the Indian private sector.

He said any proposal beyond 26 percent FDI will be recommended to the CCS when it involved state-of-art technology.

"In defence production, 26 percent through FIPB (foreign investment promotion board) route stays. For state-of-art technologies, FDI beyond this to be approved through CCS," Sharma said.

"Proposals beyond 26 percent where the project brings state-of-the-art technology, the decision rests with CCS. Only those proposals will be recommended (to CCS) where state- of-the-art technology is involved," he added.

Sharma said the decisions concerning FDI will be taken to the cabinet.

Reacting to the decision, FICCI president Naina Lal Kidwai said there was no change in sectoral cap on FDI in defence but the move to give clearance on case-to-case basis was significant.

She said that the industry will wait to see how the decision is implemented.

"Defence is a very important sector for investment," she told IANS.

The government move is in line with the stance of Defence Minister A.K. Antony, who had opposed the move to raise the FDI in defence manufacturing from 26 percent to 49 percent but had said that permission for the FDI beyond 26 percent can be given on a case-to-case basis if it would lead to access to modern technology. He had said that such clearance can be given by the cabinet committee on security.

Antony had opposed the suggestions to raise the FDIin defence production to 49 percent, saying that it will affect the domestic industry's growth.

Antony had written to Sharma stating that his ministry was of the view that FDI in the defence manufacturing sector should stay at 26 percent.

Antony, who has consistently pitched for the growth of the domestic defence industry, had said that allowing foreign companies to set up manufacturing facilities will hamper growth of indigenous research and design development.

Antony also stated that the FDI cap should not be raised as the country cannot be dependent on foreign companies or policies of countries of their origin in the defence sector on a long-term basis.

A committee headed by Economic Affairs Secretary Arvind Mayaram had recommended that the FDI limit be raised to 49 percent in several sectors through the automatic route.

The committee had suggested that the FDI in defence be raised to 49 percent under the government approval route.

Sources said that commerce ministry had also proposed hiking the FDI in defence.

Matches

MORE TOP STORIES TODAY

Bowling worries for Super Kings

Bowling worries for Super Kings

After failing to defend a mammoth 205 against Kings XI Punjab, Chennai have a lot to think about. More »

Punjab pull off another big chase

Punjab pull off another big chase

GAME 7, SHARJAH—Maxwell, Miller, Pujara chase down Rajasthan's 192. More »

T20 test for Cheteshwar Pujara

T20 test for Cheteshwar Pujara

The class act from Saurashtra may have to rethink his approach to the mannerless format. More »

Special meeting to replace Srinivasan

Special meeting to replace Srinivasan

The BCCI is likely to convene a special general body meeting (SGM) in May to replace N Srinivasan on the board's disciplinary committee. More »

Shastri in proposed IPL probe panel

Shastri in proposed IPL probe panel

Some members stressed on the need for proposing names with an "impeccable record and clean image". More »

[INTERVIEW] Lankan veterans grateful for 'unwavering' fans

[INTERVIEW] Lankan veterans grateful for 'unwavering' fans

Mahela Jayawardene and Kumar Sangakkara go over their World T20 win, and feel grateful to have fans whose support remains unwavering in victory and de… More »

Roach escapes injury after car crash

Roach escapes injury after car crash

The West Indies fast bowler lost control of his BMW sedan due to slippery road conditions in his native Barbados on Saturday. More »

Need to improve fielding: Ashwin

Need to improve fielding: Ashwin

Lacklustre Super Kings, fast-improving Sanju Samson and other news from IPL-7. More »

Repose faith in Indian coaches

Repose faith in Indian coaches

All of them cost plenty of dollars which I feel is unnecessary for a two- month tournament, says former cricketer Yajurvindra Singh. More »

Cook relieved after period in limbo

Cook relieved after period in limbo

The England captain is looking forward to a fresh start after a dispiriting Ashes defeat last year. More »

Chaos threatens to engulf SL again

Chaos threatens to engulf SL again

As Lanka's head coach decides to jump ship, euphoria over winning an ICC tournament has dissipated into fuistration. More »

Jayasuriya unhappy at Farbrace conduct

Jayasuriya unhappy at Farbrace conduct

Sri Lanka's chief selector is upset at news of head coach Paul Farbrace's possible move to England. More »

Panel can help clean mess: Raghavan

Panel can help clean mess: Raghavan

The former CBI Director is one of three candidates proposed by the BCCI to head the enquiry into the IPL betting and spot-fixing scandal. More »

Have nothing to prove to anybody — Sehwag

Have nothing to prove to anybody — Sehwag

The Nawab of Najafgarh says a good run in IPL could help his chances of a comeback on India's tour to England in June. More »

Duminy steals first win for Delhi

Duminy steals first win for Delhi

Furious fifties by Duminy and Dinesh Karthik end a long losing streak for the Daredevils. More »

Five things England must do to bounce back

Five things England must do to bounce back

England have appointed a new head coach in Peter Moores. More »

AB, Parthiv seal Bangalore's second win

AB, Parthiv seal Bangalore's second win

Royal Challengers overcame a stutter to cruise to the small target they were set by Mumbai Indians. More »

‘Felt like helpless minority’

‘Felt like helpless minority’

Former BCCI treasurer Ajay Shirke says emotions got the better of Srinivasan and he tried to oversimplify things by calling Meiyappan an “enthusiast.” More »

Royal test for Kings

Royal test for Kings

Preview — Clash of philosophies between Australia-centric teams More »

No way back for Pietersen: ECB

No way back for Pietersen: ECB

Kevin Pietersen's hopes of reviving his international career appeared to end Saturday when ECB managing director Paul Downton said there was 'no way back'… More »

The world record that nearly wasn't

The world record that nearly wasn't

Twenty years ago this week, Brian Lara became Test cricket's highest scorer, but he almost didn't make it. More »

Srinivasan can attend BCCI meeting

Srinivasan can attend BCCI meeting

His status as president of TNCA makes him eligible to attend the Working Committee meeting on Sunday. More »

Maxwell carves his parallel universe

Maxwell carves his parallel universe

Glenn Maxwell seems to project an icy disdain when at the crease. Match situations rarely faze him and the bubble in which he plays excludes everyone … More »

Moores gets second stint as coach

Moores gets second stint as coach

In a two-year spell from 2007 to 2009, the 51-year-old Moores led England in seven Test series. More »