The government has approved up to 74 percent foreign direct investment in the defense sector through the automatic approval route. This step has been taken with the intention of attracting foreign investors. The Department of Industry and Internal Trade Promotion said this in a press note released on Thursday.

It added, however, that foreign investment in the defense sector would depend on an investigation based on national security and the government reserves the right to review any foreign investment in the defense sector that affects national security or taxes Can.

Under the current FDI policy, 100 percent foreign investment is allowed in the defense industry. It requires 49 percent automatic approval while government approval is required for the above. According to press note 4, for companies seeking new industrial licenses, FDI up to 74 percent will be allowed through the automatic approval route.

It states that up to 49 per cent of new investments in companies that are not seeking industrial licenses or which already have government approval for FDI in the defense sector, change in equity, shareholding pattern or by the existing investor For FDI up to 49 percent, the stake is transferred to new foreign investors, it will inevitably need to be announced before the Ministry of Defense.