India’s New Defense Investment Policy Disappoints
Indian commerce minister Anand Sharma (Photo: Ministry of Commerce, India)
Indian commerce minister Anand Sharma (Photo: Ministry of Commerce, India)

Indian commerce minister Anand Sharma announced the raising of the country’s cap on foreign direct investment (FDI) in 13 important industrial sectors, including defense. But while the defense industry was expecting the cap to be raised to 49 percent from the present 26 percent, Sharma said that defense proposals for more than 26 percent will be permitted only for state-of-the art technology. The Cabinet Committee on Security (CCS), a body that decides on matters of national security, will consider any proposals “on a case-by-case basis.” Because “state-of-the-art” products were not defined, it falls to the Ministry of Defense to make the decision, said Sharma.

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