With the commerce ministry suggesting an increase in foreign direct investment (FDI) in the defence sector from the existing 26 per cent to 74 per cent, Defence Minister A K Antony said on Thursday a higher FDI could be considered “on a case-to-case basis”. At the same time, he said the increase would not be done just as a standard policy as the industry was not “mature enough”.
“At the moment, it (policy on FDI in defence) is 26 per cent. Our Defence Production Policy is evolving over the years...But at the moment, we feel the Indian defence sector is not mature enough...Not ready to absorb more FDI in the sector. We feel that time is not right to further expand it,” Antony told reporters after addressing Navy Commanders in Delhi.
At the same time, he said higher FDI in defence could be allowed “on a case-to-case basis” and that “ultimately, forever I cannot rule out (higher FDI)”. He was responding to a question on the commerce ministry’s suggestion that FDI in the defence sector be raised to 74 per cent from the existing 26 per cent to augment resources for greater acquisition of equipment for the armed forces. “The commerce ministry has brought out a discussion paper only. The commerce minister himself said it is a discussion paper. We can discuss. There is no problem. You should not think there is a clash (between the two ministries),” Antony said.