Centre increases FDI limit in defence from 49% to 74% under automatic route

The Central government has increased the foreign direct investment (FDI) limit in the defence sector from 49 to 74 per cent under automatic route and beyond 74 per cent through the government route.
Foreign investments in defence sector shall be subject to scrutiny on grounds of National Security. In line with collective vision of Aatmanirbhar Bharat, amendments will enhance self-reliance in defence production, while keeping national interests & security paramount.
Infusion of fresh foreign investment up to 49 per cent, in a company not seeking an industrial license or which already has Government approval for FDI in Defence, shall require mandatory submission of a declaration with the Ministry of Defence in case change in equity/shareholding pattern or transfer of stake by existing investor to new foreign investor for FDI up to 49%, within 30 days of such change. Proposals for raising FDI beyond 49% from such companies will require government approval.
The investee company should be structured to be self-sufficient in the areas of product design and development.
The investee/joint venture company along with the manufacturing facility should also have maintenance and life cycle support facility of the product being manufactured in India.