The Government is not planning to make provision for 100 per cent foreign direct investment in defence production, the Minister of State for Defence, Mr M.M. Pallam Raju, told the Rajya Sabha on Wednesday.
No request for permitting 100 per cent FDI has been received from L&T, Tata, Mahindra and Punj Lloyd, the Minister said.
FDI up to 26 per cent is permitted in the defence sector according to the extant rules, the Minister said, and added that the policy was arrived at taking into account the sensitive nature of the sector.
Early last year, the Foreign Investment Promotion Board approved a proposal of Mahindra and Mahindra to set up a joint venture company with BAE System to develop, manufacture and provide life service support for land defence systems. Mahindra is to hold a 74 per cent stake in the project with the remaining being held by BAE Systems.
