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of <h1>Private Sector Arms Production Allows 26% FDI with Government Approval and Strict Licensing Rules</h1> Licenses for production of arms and ammunition in the private sector allow up to 26% foreign direct investment, subject to government approval and licensing by the Department of Industrial Policy & Promotion in consultation with the Ministry of Defence. Applicants must be Indian entities with Indian management majority. Foreign investors' credentials and financial standing are scrutinized, with preference to established manufacturers. A three-year lock-in applies to foreign equity transfers, requiring prior approval. Production capacity and safety standards are regulated, with quality assurance overseen by government agencies. Sales are primarily to the Ministry of Defence, with restricted sales to other government bodies and controlled export policies. Non-lethal items may be sold to approved non-government entities. Violations can result in license cancellation. Application decisions for FDI cases are communicated within ten weeks of acknowledgment.
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