The Department of Industrial Policy and Promotion (DIPP) has circulated a Discussion Paper suggesting raising FDI cap in Defence manufacturing sector to 74% or more from the existing 26%.

This issue is under inter ministerial consultations and a final decision will be taken by Government thereafter.

Government has a policy of moving towards greater self- reliance in Defence Production. To this end, it seeks to encourage indigenous research, development and design of equipment/weapons system within the country.

This information was given by Minister of State for Defence Shri MM Pallam Raju in a reply to Shri Manish Tewari and others in Lok Sabha today.

FDI in defence: proposal to raise investment cap under interministerial review to promote indigenous production. A departmental Discussion Paper proposes raising the FDI cap in defence manufacturing and is under inter ministerial consultations pending a Government decision, framed as part of policy to enhance self reliance by encouraging indigenous research, design and development of defence equipment.