It’s going to be much easier for foreign weapons makers to start business in India soon!

India is planning to ensure eligibility is simplified foreign defence equipment manufacturers to invest up to 100% in Indian ventures as part of the big-ticket reform package to be rolled out before the winter session of Parliament.

At present, India allows up to 49% foreign direct investment in the defence sector and up to 100% FDI is allowed in projects involving state of the art technology, to be approved by the Cabinet Committee on Security on a case to case basis.

The government has begun discussions to bring clarity on what 'state of the art' implies so as to expand the basket of products to become eligible for higher foreign investment and reduce the country's reliance on imports, a top government official said. "We are looking at simplifying the overall framework," the official told ET.

"A number of sectoral conditions do not mean much and create unnecessary deterrent." Another government official said that there are a host of conditions specified in FDI policy that even cover appointment of chief security officer. The government plans to streamline and simplify these conditions, particularly for dual use products.

The proposal is expected to be finalised shortly, the second official said The Narendra Modi-led government considers defence production as one of the focus areas to ramp up the country's manufacturing sector, which is slowly moving back towards recovery.

Image credit: Indiatimes