DPIIT likely to ease FDI norms for existing defence license holders

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

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

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The government had earlier liberalised FDI rules for defence companies with new licences, raising the limit from 49% to 74% under the automatic route. The proposed move is aimed at bringing parity in the FDI regime for both new and existing investments in the defence sector.

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