DPIIT should relax FDI norms for existing defense license holders

The Department for Promotion of Industry and Internal Trade (DPIIT) may soon liberalize foreign direct investment (FDI) norms in the defense sector for companies with existing investments, sources told CNBC-TV18.

According to CNBC-TV18 sources, the government is considering increasing the FDI limit for defense companies with existing licenses from 49% to 74% through automatic route.

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The government had earlier liberalized FDI rules for defense companies with new licenses, increasing the limit from 49% to 74% under the automatic route. The proposed measure aims to introduce parity in the FDI regime for new and existing investments in the defense sector.

Foreign direct investment (FDI) in the defense sector was liberalized in September 2020 to attract foreign investment, allowing up to 74% FDI through the automatic route and over 74% through the government route.